
Book- u %S 



RECORD 



OF 



APPRAISEMENT 



OF 



SCHOOL FUND PROPERTY 

1905 



QP 



a 



PRESS OF BARNARD & MILLER, CHICAGO 

^137 






v^;y 



H 



X 



1 

ri 



INTRODUCTION. 



The report of the appraisers of School F^nd Proper- 
ty, Messrs. John McLaren, Wm. D. Kerfoot and Arba 
N. Waterman, duly appointed appraisers under the 
terms of certain supplemental leases made between the 
Board of Education of the City of Chicago and certain 
lessees was presented to the Board of Education, by the 
president, on May 26, 1905. 

The above named appraisers were appointed, one by 
the Board of Education, one by the judge then holding 
the Circuit Court of the United States in and for the 
Northern District of Illinois and one by the Judge of the 
Probate Court of Cook County, Illinois, and such ap- 
praisement was made for the purpose of fixing the 
ground rent of School Fund Property for a period of ten 
(10) years from May 8, A. D. 1906. 

This appraisement for the term of ten (10) years 
ending May 8, 1915, increases the revenues from this 
source to a most gratifying extent. The aggregate value 
of the property appraised under the terms of existing 
leases has been increased very largely from the valua- 
tions of 1895. At the present writing this appraisement 
is still the subject of litigation in the courts, but the 
action of the appraisers has been upheld by the Appel- 
late Court. 

See: 

Sehree v. Board of Education, Appellate Court, 
First District of Illinois, G. N. 17562. 

If this appraisement be finally upheld by the Supreme 
Court where some of these cases are now pending, the 



11 



increase in revenue to the Board will amount, in round 
figures, to about $140,000 per year, making the increase 
for the ten (10) years the sum of $1,400',00'0. 

These figures, when compared with those received by 
the Board from this property in the year 1880, when 
the supplemental leases were entered into, indicate the 
growing worth and value of Chicago real estate. There 
is a still more marked ditference between these figures 
and the figures of 1855, the time when the revaluation 
leases were entered into by the Board of Education, 

We have prepared, for this record oi appraisement 
of the School Fund Property of the Board of Education, 
two (2) tabulated statements; one of these tables con- 
sists of School Fund Property, in Block 142, and one con- 
cerns School Fund Property in other parts of the city. 

All of the property tabulated under the ninety-nine 
(99) year or straight leases formerly was leased under 
revaluation clause leases, and we have taken some pains 
to show by these tables the annual rent paid by the 
lessees prior to the time that the leases were changed to 
straight ninety-nine (99) year leases. 

A comparison of these tables will be very instructive 
to all persons interested in this matter. 

Of the original grant. Section 16, only blocks 1 and 
142 remain intact. A JDortion of block 113 is in posses- 
sion of the Board of Education. In 1833 all but four 
blocks of the original school Section 16 were sold for the 
sum of $38,619.47. The blocks reserved were Nos. 1, 87, 
88 and 1-12. Later on, in 1874, the south half of blocks 
87 and 88 were exchanged for the old postoffice site and 



Ill 

building on the northwest corner of Monroe and Dear- 
born streets. In 1888 the north half of blocks 87 and 88 
were sold to John P. Neal, who mortgaged it back to the 
Board for fifty years on a basis of five per cent, on a 
valuation of $650,000: The old postoffice site is under 
lease to the National Safe Deposit Company until 1931, 
without revaluation, the annual rental until then being- 
fixed at $29,700. 

It is evident that these properties are not only of great 
present worth, but that they promise to continually in- 
crease in value and to make a mucli greater return to the 
Board of Education in the future. 

Frank Hamlin, 
Attorney for the Board of Education 
of the City of Chicago. 



I HEREBY CERTIFY that tliG documents lierewith pre- 
sented are correct copies of briefs and exhibits filed with 
the Board of Appraisers, duly appointed by the Board 
OF Editcatiots^ ; Hon. Charles S. Cutting, Judge of the 
Probate Court of Cook County, Illinois, and Hon. 
Christian C. Kohlsaat, Judge then holding the Circuit 
Court of the United States in the Northern District of 
Hlinois. 

I also certify that the tabulated statements herein 
contained show the appraised cash value and rentals of 
all School Fund Property from the year 1855 to date. 

Louis E. Larson, 
Secretary Board of Education of the 
City of Chicago. 



School jFunb property 



STATEMENT OF APPRAISEMENT AND RENTALS FROM 1855 TO AND INCLUDING 1905 
LOTS IN BLOCK 142, SCHOOL SECTION ADDITION 



1Re^\>aluation ^Leasee 
















































Lessee 


Description 


Lot 


look Sijoot Lot Sq. Ft. 


APP^'^'Honta, 


Appraisal 
1800 


Rental 


Appraisal 
186.5 


Rental 


Appraisal 
1870 


Rental 


Appraisal 
1875 


Rental 


Appraisa 
1880 


Rental 


Appraisa 
1885 


Rental 


Appraisal 
1805 


Rental 


Appraisal 
1905 


Rental 


Jacob L. ICesner 


6 S. State St. 


3 


142 24x120 


2880 


$2520 


151.20 


$2640 


$158.40 


$6000 


$360.00 


*$31200 


$1872.00 


$24000 


$1440.00 


$ 43200 


$2592.00 


$72000 


S4320.00 


$160000 


$ 9600.00 


$360000 


$21600.00 


Est. Henry Weil ] 
Est. Geo. Rodksavell | 


18 / 


7 


■■ 


24x120 


2880 


2620 


151.20 


2640 


158.40 


6000 


360.00 


*31200 


1872.00 


24000 


1440.00 


36000 


2160.00 


72000 


4320.00 


150000 


9000.00 


312000 


18720.00 


Rosalie Cavana 1 


22 f 


8 




24x120 


2880 


2760 


165.60 


2880 


172.80 


6480 


388.80 


* 36000 


2160,00 


25200 


1512.00 


39600 


2376.00 


79200 


4752.00 


170000 


10200.00 


324000 


19440.00 










1 




186.30 


3375 


202.50 


8200 


492.00 


* 40740 


2444.40 


27160 


1629 60 


1 


1 


81480 


4888.80 


] 








McVlCKER 


17-23-25-27 J 
W. Madison St. 1 


in 






H5644,16 


2835 


170 


10 


3240 


194.40 


7900 


474.00 


* 32592 


1955.52 


23765 


1425,90 


H38516 


^8310.90 


81480 


4888 80 


U5OOOO 


27000.00 


896280 




Theatre Co. 


11 






J 


3105 


186 


10 


3375 


202.50 


8200 


492.00 


* 40740 


2444.40 


27160 


1629.60 


1 


J 


81480 


4888.80 


1 










17-19 / 


IS 




24x120 


> 5700 


2400 


144 


00 


2520 


151.20 


7200 


432.00 


* 28800 


1728.00 


14400 


864.00 






4800(1 


2880 00 




11400.00 


384000 


23040.00 




S. Dearborn St.l 


in 






2640 


1.58 


40 


2640 


158.40 


7680 


460.80 


* 33600 


2016.00 


15600 


936.00 








54000 


3240.00 










Alice F. Cuambers J 


23-25 / 


20 






> 5 00 


26 


8 


40 


2640 


158.40 


7680 


460.80 


* 33600 


2016.00 


15000 


900.00 


21600 


1296 


00 


54000 


3240.00 


I 187000 


11220.00 


384000 


23040.00 


Asa W. Farwell ] 


S, Dearborn St, \ 


21 










00 


2520 


151.20 


7200 


432.00 


* 27600 


1650.00 


13200 


792.00 


19200 


1152 


00 


48000 


2880.00 














2.3 








2 




00 


2520 


151.20 


7200 


432.00 


* 27600 


1656.00 


13200 


792.00 


19200 


1152 


00 


48000 


2880.00 














24 








2 


4 


00 


2520 


151.20 


7200 


432.00 


* 27600 


1656.00 


13200 


792.00 


19200 


1152 


00 


48000 


28S0.00 












31-33 1 








^12480 





4 


on 


2520 


151.20 


7200 


432.00 


* 27600 


1656.00 


13200 


792.00 


19200 


1152 


00 


54000 


3240.00 


U4OOOO 


32400.00 


998400 


59904.00 


CaiLLY 




26 








240 


44 


00 


2640 


158.40 


7440 


446.40 


* 28800 


1728-00 


14400 


864.00 


24000 


1440 


00 


60000 


3600.00 


Inelud 


esS.Stt. 


Lot 23 








27 








2880 


2 


80 


3000 


180.00 


8400 


504.00 


* 37200 


2232.00 


21600 


1296.00 


36000 


2160 


00 


72000 


4320.00 






U36OOO 




Louis M. Stumer 
Benj. J. Rosenthal 


24 S. State St. / 
26 ■' \ 


31 
32 




24x120 


> 5 CO 


2 60 
2400 


65 
44 


60 
00 


2880 
2640 


172.80 
158.40 


6480 
6000 


388.80 
360.00 


* 36000 

* 30000 


2160.00 
1800.00 


24600 
23400 


1476.00 
1404.00 


39600 
36000 


2376 
2160 


00 
00 


79200 
67200 


1752.00 
1032.00 


165000 
150000 


9900.00 
9000.00 


38160.00 


Est. Geo. B. JENK1NS0^ 


28 


33 






2880 


2400 


44 


00 


2640 


158.40 


6000 


360.00 


* 30000 


1800.00 


22800 


1368.00 


36000 


2160 


00 


67200 


4032.00 


150000 


9000.00 


300000 


18000.00 


A. Bishop & Co. 


34 


34 




" 




2400 


44 


00 


2640 


158.40 


6000 


360.00 


* 30000 


1800.00 


22800 


1368.00 


36000 


2160 


00 


67200 


4032.00 


loOOOO 


9000.00 


2S8000 


17280.00 




























* Less 40% Irom $'1,377,181.00 of appraisal of lots in burnt district, as 


per settlement with lessees. 







School iFunb property 

STATEMENT OF APPRAISEMENT AND RENTALS FROM 1855 TO AND INCLUDING 1905 



Stratgbt leases 


















LUl'S 


lis I 


3LOCI 


1 i 


i2 


, tiUti 


UUL 


bliUi 


J.U1 


N 


AUU 


iiiur> 














Straight leases 


Lessee 


Description 




l,ot 


Block 


Size of Lot 


Square 
Feet 


Appraisal 
1S,56 


Rental 


Appraisa! 
ISCO 


Rental 


Appraisal 
1805 


Rental 


Appraisal 
1870 


Rental 


Appraisal 
1875 


Rental 


Appraisal 
1880 


Rental 


Appraisal 
1885 


Rental 


Appraisal 
1895 


Rental 


Annual 
Rental 


From 


To 


Incre.is6 over pre- 
vious Rental Period 
















































$26775-00 


Hay 


3, 1901 


M,ay 8,1916 


5% 


Est. Jos. E. Otis 


2 S. State St. 


E. ; { 


'■ 


142 


48'x 80' 


3840 


$3240 


$194.40 


$4200 


$252.00 


$8400 


$504-00 


*$48000 


$2880-00 


$37200 


$2232.00 


[$192000 


$11520.00 


$252000 


$15120.00 


$425000 


$25500-00 


28113-75 
29519-43 
f 8820.00 


„ 


S. 1915 
S. 1930 
,1901 


" S, 1930 
■' S, 1985 
" 8, 1915 


5% 














































90000 


.5400.00 


140100 


8400 00 


i' 9261.00 


" 


, 1915 


■' 8, 1930 


5% 


I!ST. Geo. L. Otis 


14 S. Stat* St. 


w.sj 


1 


142 


48'x 40' 


1920 


2520 


151.20 


2760 


165.60 


6480 


388-80 


* 36000 


2160-00 


26400 


1584.00 














i 9724 05 




, 1930 


" 8, 1985 


5% 




10 " " " 




4 


14'' 






2520 


151 


20 


2640 


158.40 


6000 


360 


00 


* 31200 


1872-00 


24000 


1410 


00 


36800 


2208.00 


72000 


4320.00 


1 




27000.00 


July 1 


, 1901 


fMay 8,1905 


0% 


BuiLDiNQ Company 


12 

4 " " " 




5 
6 
1? 




24'xl20' 
24'xl20' 
24'xl20' 


• 8640 


2520 
2520 
3000 


151 
180 


20 
20 
00 


2640 
2640 
3840 


158.40 
158.40 
230.40 


6000 
6000 
9600 


360 
360 
576 


00 
00 
00 


* 31200 

* 31200 

* 45600 


1872-00 
1872-00 
2736-00 


24000 
24000 
30000 


1440 


00 


36800 
36800 
1 


2208.00 
2208.00 


72000 
72000 


4320,00 
4320.00 


ksoooo 


27000,00 


28350 00 
29707.. 50 
312.55-87 


May 


, 1905 
' 1915 
' 1925 


1 " " 1915 
1 " " 1925 
[ " " 1985 


5% 
6% 




1800 


00 


5% 








13 








2400 


144 


00 


2640 


158.40 


7080 


460 


80 


* 34800 


2088-00 


18000 


1080 


00 


M 29600 


7776.00 


300000 


18000.00 


5OOO0O 


\30000,00 












CmcAQO 


3-6-7-11 i. 15 




14 








2400 


144 


00 


2520 


151,20 


7200 


432 


00 


* 28800 


1728-00 


14400 


864 


00 


J 












45120.00 


Dec. 14, 1899 


May 8, 1905 




TninoNE Co. 


S. Dearborn St. 




15 






H72S0 


2400 


144 


00 


2520 


151.20 


7200 


432 


00 


* 28800 


1728-00 


14400 


864 


00 


21000 


1296.00 


48000 


2880.00 


81000 


.5040,00 


< 47376.00 


May 


, 1905 


" 8, 1915 


5% 








10 








2400 


144 


00 


2520 


151.20 


7200 


432 


00 


* 28800 


1728.00 


14400 


864 


00 


21600 


1296.00 


48000 


2880.00 


84000 


5040,00 


47640.60 




, 1915 


" 8, 1985 


5% on Lot 17 only 








17 


■• 






2400 


144 


00 


2520 


151-20 


7200 


432 


00 


* 28800 


1728.00 


14400 


864 


oc 


21600 


1296.00 


48000 


2880.00 


84060 


5040-00 












Carolinf. f. 
W11.S0K 


27-29 
S. Dearborn St. 




22 
23 


142 

j 142 


a4'xl20' 
24'xl20' 


2880 
2880 


2400 
2400 


144 
144 


00 

no 


2520 
2520 


151.20 
151.20 


7200 
7200 


432 
432 


00 
00 


* 27600 

* 27600 


1656.00 
1656.00 


13200 
13200 


792 
792 


00 
00 


19200 
19200 


1152,00 
1152.00 


48000 
48000 


2880.00 
2880.00 


> 133000 


7980,00 


8379.00 


May 


, 1905 


May 8, lOSi 


5% 


AlioiiSTA Li'lHMANH 22 W. Monroo St. 1 


2S ' 142 
29 142 


>54.32'xl92' 


10429.44 


2070 
2700 


178 
162 


20 


2970 
2700 


178.20 
102 00 


8640 
8370 


518 
502 


40 
20 


* 35308 
*27160 


2118.48 
1629.60 


20370 
16296 


1222 
977 


20 
76 


> 51604 


3096.24 


48888 
40740 


2933.28 
2444-40 


> 230000 


13800-00 


18000 00 


May 


, 1905 


May 8,2001 


23-f% 




30 1 142 


27.16'sl92' 


5214.72 


2970 


178 


20 


2970 


178,20 


8640 


518 


40 


* 35308 


2118.48 


20370 


1222 




27160 


1629.60 


4S88S 


2933-28 


110000 


6600-00 


9000.00 


May 


, 1905 


May 8,2001 


36+% 




35 ■ 112 


24'sl20' 


1 


2400 


114 


00 


2640 


158-40 


6000 


300 


00 


* 30000 


1800.00 


22800 


1368 


00 


36000 


2160.00 


67200 


4032-00 


150000 


9000-00 


|'l7500.00 


Jan. 


, 1901 


May 1,1005 


35+ 


1 S. Stole Street 
Louis Eckstein 


30 I 142 


24'.\120' 


[ 


2400 


144 


00 


2040 


158-40 


6000 


360 


00 


* 30000 


1800.00 


22800 


1368 


00 


36000 


2160.00 


67200 


4032-00 


1601100 


9600 on 


1 49875 00 


May 


, 1905 


" 1, 1915 


5% 


37 142 


24'xl20' 


f 


2400 


144 


00 


2640 


158-40 


6480 


388 


80 


* 32400 


1944.00 


23400 


1404 


00 


43200 


2592.00 


72000 


4320-00 


200000 


12000-00 


1 52368.75 




, 1915 


•• 1, 1925 


5% 


38 ! 142 


24'xl20' 


' 


2SS0 


172,80 


3240 


194-40 


9120 


547 


20 


* 40800 


2448,00 


30000 


1800 


00 


54000 


3240.00 


96000 


5760.00 


240000 


14400-00 


[56434.18 


" 


, 1925 


" 1, 2000 


7+% 



" Less 10% from $1,377,181.00 of appraisal of lots in burnt dislricl, as per settlement with lessees. 



School jfunb Ipropert^ 



1Rc=»valuatlon Xeases 



STATEMENT OF APPRAISAL AND RENTALS OF LOTS OTHER THAN THOSE IN BLOCK 142, 
SCHOOL SECTION ADDITION 



Name of Lessee 


Street Description 


Lot 


Bloek 


Size of Lot 


Square 
Feet 


Appra 
185 


sal 


Annual 
Rental 


Appraisal 
1860 


Annual 
Rental 


Appraisal 
1863 


Annual 
Rental 


Appraisal 
1870 


Annual 
Rental 


Appraisal 
1875 


Annua! 
Rental 


Appraisal Annual 
18S0 Rental 


Appraisal 
1SS5 


Annual 
Rental 


.\ppraisal 
1895 


Annual 
Rental 


Appraisal 
1905 


Annual 
Rental 




Sdiool .SeetioJ 














































South 


2 




25'xIOO' 


2500 


81000.00 


$60.00 !1125,00 


$67.50 


$1500.00 


$90.00 


t$7500.00 


$450-00 


$6250.00 


$375-00 






$11250.00 


675 00 












East 


3 




25'xlOO' 


2500 


1000 


00 


60 


00 


1125 00 


67.50 


1500 


00 


90 


00 


t750O.0O 


4.50-00 


6250.00 


375.00 






11250.00 


675.00 












Comer 


4 




25'xIOO' 


2500 


1000 


00 


60 


00 


1125.00 


67 -.50 


1500 


00 


90 


00 


t7500-00 


4.50-00 


6250-00 


375.00 






11250.00 


675.00 






y$750OO,0O 


$4500.00 




of 


5 






2500 


1000 


00 


CO 


00 


1125-00 


67.50 


1500 


00 


90 


00 


17500-00 


450-00 


6250- 00 


375.00 1 


$83783.33 


$5027.00 


11250.00 


675.00 


$180000,00 


$10800-00 








W. Madison 


6 






2500 


1000 


00 


60 


00 


1125-00 


67.50 


1500 


00 


90 


00 


t7500-00 


450-00 


6250-00 


375.00 






11250.00 


675.00 








and 


7 




25'xIOO' 


2500 


1000 


00 


60 


00 


1125.00 


67.50 


1500 


00 


90 


00 


t8750-00 


525-00 


6875-00 


412-50 






12500.00 


750.00 












Halstcd 


8 




25'xlOO' 


2500 


1250 


00 


75 


00 


1500-00 


90.00 


2000 


00 


120 


00 


112500-00 


750-00 


10000-00 


600-00 






25000.00 


1500.00 






> 63750.00 


3825.00 


CHARLES 


Sts. 


9 




25'xlOO' 


2500 


700 


00 


42 


00 


700.00 


42.00 


800 


00 


48 


00 


14000-00 


240-00 


4000-00 


240-00 






25000.00 


1500.00 


1 








H. 


North 


U 




25'xI50' 


3750 


800 


00 


48 


00 


875-00 


52-50 


1000 


00 


60 


00 


tSOOO 00 


300-00 


4375-00 


262-50 






10000.00 


600.00 










East 


12 






3750 


800 


00 


48 


00 


875.00 


52-50 


1000 


00 


60 


00 


t5000-00 


300,00 


4375-00 


262 50 






10000.00 


600.00 










BLAIR 


Corner 


13 






3750 


80O 


00 


48 


00 


875.00 


52-50 


1000 


00 


60 


00 


tSOOO-OO 


300-00 


4375 00 


262-50 






10000.00 


600.00 






[ 52500.00 


3150.00 




W. Monroe 


14 






3750 


800 


00 


48 


00 


875.00 


.52.50 


1000 


00 


60 


00 


tsooo.oo 


300 00 


4375.00 


262-50 






10000.00 


600.00 












and 


15 




" 


3750 


700 


00 


42 


00 


700-00 


42.00 


800 


00 


48 


00 


t4000-00 


240,00 


3800,00 


228-00 




1000.00 


10000.00 


600 00 




8700.00 








Halsted 


16 




25'xIOO' 


2500 


900 


00 


54 


00 


937-50 


56-25 


1250 


00 


75 


00 


t6250-00 


375-00 


5625.00 


340-50 






8125.00 


487. .50 










Street 


17 






2500 


750 


00 


45 


00 


875-00 


52.50 


1000 


00 


60 


00 


13750-00 


225 00 


3375.00 


202.. 50 






8125.00 


487.50 






j- 26250 00 


1575.00 






IS 






2500 


750 


00 


45 


00 


875-00 


52.50 


1000 


00 


CO 


00 


13750-00 


225-00 


3375-00 


202-50 






8125.00 


487.50 














19 




25'xIOO' 


2500 


750 


00 


45 


00 


875-00 


52-50 


1000 


00 


00 


00 


13750-00 


225-00 


3375-00 


202-50 






11250.00 


675.00 






> 27712 50 


1664.55 






20 




30.05'xIOO' 


3005 


750 


00 


45 


00 


875-00 


52-50 


1000 


00 


CO 


00 


13750-00 


225-00 


3375-00 


202.50 






16492-50 


9,89 ,55 






TnOa. CODOHLAN 


78 S. Halsted St. 


10 




2O'xI50' 


3000 


800 


00 


48 


00 


875-00 


52.50 


1000 


00 


60 


00 


15000.00 


300.00 


4375.00 


202 50 


5000-00 


300.00 


9000.00 


450-00 


13000-00 


780-00 


10000 00 


COO.OO 


Board of Education 


Workshop 4 Supply 






['204.92'xI89 












































OP THE City OF Cbicaqc 


i Department 135-57 W. 
Monroe Street 


21 


1 


<. 50'xU8.325 
[34'xlOO'. 


48086.13 


750.00 


45.00 


875.00 


52.50 


1000 


00 


60 


00 


13750.00 


225.00 


3375.00 


202.50 


21669.00 


1300.14 


28892.00 


1733-52 


117.000-00 


7020.00 


90172,26 


67703.36 


John O'Mallet, Jr. 


1 Jackson Boul. and 


E. i oil 


52 


50'x80.025' 


4001.25 






888.33 


53.30 


1000 


00 


60 


00 


12400.00 


144.00 


3501.09 


210.06"! 


8000.00 


480.00 


6000.00 


360-00 


14000-00 


840.00 


20000.00 


1200.00 


Est. Mahq't Hurtz 


/ Clinton St. 


W. i ol I 


52 


50'x80.025' 


4001.25 


3000.00 


180.00 


1111.67 


66.70 


1500 


00 


90 


00 


15000.00 


300.00 


4500.00 


270.00/ 


8000.00 


480-00 


20000,00 


1200.00 


30000.00 


1800,00 


Board of Education 
OF TUB City of CmoAOO 


N. E. Comer Division f 


awF-Sior 


Sub-Lot 2 


I81.05'x264' 


4779.72 






5000.00 


300.00 


6000 


00 


360 


00 


34320.00 


2059,20 


27157.50 


1629-45 


32000 00 


1920-00 


50000.00 


3000 00 


82000,00 


4920,00 


71695.80 


4301.75 



t Less 25% from $194,100,00 of appraisal of lota out of burnt district, as per settloniont with lessees. 



Stratgbt Xeaece 



School Jfunb property? 

STATEMENT OF APPRAISAL AND RENTALS OF LOTS OTHER THAN THOSE IN BLOCK 142, 
SCHOOL SECTION ADDITION 



Straiobt ILeaees 



Name of 


Street 










ippraisal 


Annual 


Appraisal 


Annual 


Appraisal 


Annual 


Appraisal 


Annual 


Appraisal 


Annual 


Appraisal 


Annual 


Appraisal 


Annual 


Approisal 


Annual 


Annual 






na>.,«..„i 


Lehseh 


Description 


Lot 


lloek 


Size of Lot 


Square Feet 


1855 


Rental 


1860 


Rental 


1865 


Rental 


1870 


Rental 


1875 


Rental 


1880 


Rental 


1885 


Rental 


1895 


Rental 


Hentnl 


From 


To 


porlou 


ICuoENB 8. Pike 


161 3. State St. 


(FraotioDiil 
Scotion 16) 

Sub. Lot 3; Lot 7 

Sub. Ut 4. Lot 10 


2 
2 


> 20x83 


1660 










WOOCOO 


480 00 


•$22000,00 


$1320.00 


$17000 00 


$1020.00 


$25000,00 


$1500-00 


$50000 00 


$3000-00 


$120000,00 


$7200,00 


1 $7500.01 
> 793S,OI 


May 8, 1905lMny 8th, 19161 6% 
" S, 19151 " Sth, 103o( 6% 






{Oiirfiial T„iv„) 








































J 9000,00 


" S, 193 


" Sill, lOSB 13+% 


DAn,Y NBfffl 


W. Mndlson St. 


















































Eaiat. 


81-87 Madison St, 


6 
Sotiool Scotlon 


58 


80x160.28 


12S22.4 






11666.66 


700.00 


14000.00 


840.00 


112000.00 


6720.00 


120000.00 


7200.00 


136000.00 


8160.00 


240000.00 


14400.00 


400000.00 


24000,00 


2,5200,00 


May Sth, 1005 


May Sth, lOSf 


6% 


.lOlIN M. .SMvrii 


W-aS^aai. 


1 


1 


204.65x180 


36837 


1000.00 


60,00 


1125.00 


67.50 


1500.00 


90.00 


17500,00 


450.00 


6250,00 


375.00 


50925,00 


3055.50 


102325.00 


0139-50 


1183333.33 


10099.09 


11000,00 


May Sth, 1805 


May Stii, I98r 


0% 


KDWARD 11. 


S. W. Corn.r 


2 


52 


,50x160.05 


8002.6 


4500.00 


270,00 


3000.00 


180.00 


4000.00 


240.00 


112500.00 


750,00 


9000,00 


510.00 


10000,00 


600-00 


16000.00 


960-00 


40000,00 


2400 00 


3000.00 


luno 27lh, 1800 


May aih, 198r 


25% 


Van Inof.n 


iiml Ciinnl St. 


















































RAND, MoNaldy 


Clark, Harrison 


16 


113 


50x105.33 1 
















22500.00 


1350.00 


13750,00 


825.00 


9000.00 


540,00 


12500.00 


750,00 


No appraisemon 












&00. 


and LaSallo Sts, 


21 
22 


113 
113 


199. Six 
n05,33 
















22414 50 
30000,00 


1344,87 
1800,00 


11943,00 
20000,00 


896.58 
1200.00 


8965.80 
12000.00 


.537.94 
720.00 


12452,50 
20000,00 


747,15 
1200.00 


> ol Lots 10, 21, 
1 22 in 1895 




14375 00 


Inly 2nd, 1901 


April 30th, 1911 








14 


113 


\ 99.84X 


30802.29 














5000.00 


300 00 


5000,00 


300.00 


3750,00 


225,00 


5000.00 


300,00 


1 2J26S.0O 


1456.08 


h,5812.00 


May 1st, 1911 


April 30, 1021 








17 


113 


1 105. 33 
















4981.00 


299.04 


4984.00 


299.04 


3738,00 


224,28 


4984.00 


299,04 


UcludesN. 10.07 


t.ofLotl7 














20 


113 


\ 99.75X 








16666.66 


700.00 


20000.00 


1200,00 


5000,00 


300.00 


6000.00 


360.00 


3750,00 


225 00 


5000.00 


300.00 


J 100000.00 


0600.00 


18600,00 


May 1st, 1921 


April 30, 2000 








23 


113 


J105.33 
















7462.50 


447,76 


8706.25 


522,37 


4975,00 


298.50 


9960.00 


697.00 


Includes S. 39,17 


t,ofLoH7 














N| S 


113 


50 33x105.33 


5283.870 \ 


1875,00 


112.. 50 


750.00 


1 45.00 


1000.00 


60,00 


■2516.50 


150,99 


2516,50 


1 150,99 


2083,33 


120 999 


2510-50 


150.99 


10066,00 


003.90 














Si 






J 






750.00 


J 45.00 


1000,00 


00,00 


•2516.50 


1.50,99 


2510,50 


/l.50,99 


1679 .57 


100.77 


2516-50 


150 99 






> 1800 (10 


May Iflt, 1902 


April 30, 2000 


«01-% 






11 


113 


50.33x105.33 


5283.879 


1875.00 


112.50 


1500.00 


90,00 


2000,00 


120.00 


•5000,00 


300,00 


50U0 00 


300,00 


3337,10 


200-23 


5000-00 


300,00 


30000 (« 


ma m 














10 


113 


50x105.33 


2033.25 \ 


3750,00 


N) 225.00 


2000.00 


120 00 


3000 00 


180,00 


•112,50,00 


675,00 


0875 00 


1 412, .50 


4500.00 


270 00 


0250.00 


375.00 


2,5000 on 


1500 00 


.1.175, (K) 


\ug. lat, 1011 


MI30tb,1012 


121 % 












2033.25 J 




Si 


2000.00 


120 00 


3000,00 


180,00 


•11250,00 


675,00 


6875 00 


/412,50 


4500.00 


270-00 


0250.00 


375.00 


2S000 (JO 


1.500 l»l 


1 7500,00 
8000 (K) 


Vlay 1st, 1012 
May 111, 1922 


May Ist, 1022 
May lit, 1932 


1224-% 
04-% 


National 
Safk 

DKl'OaiT C 


100 Dearborn 
Street 


17 


119 


95x191.25 


22740 75 

Includes 

21x190' alio 


















59200,00 


9552,00 


345600.00 
Valuation 
of 1881 


20736-00 


480000.00 

Valuation 

of 1SS6 


28800.00 






8.500 OO 
.50118 00 
51000 00 


" iHt, 1032 
uly lit, 1900 
" lit, 1908 


" 111, 2000 
uly lit, 1908 
" let, 1999 


0+% 
7 + % 


























•Less 407 
leases. 

1 Less 25% 
witble 


trom $1,3 

from $19 
sseoj. 


77,181 of ap 
4, ion sppn 


iralsal of 1 
itsal of lot/ 


ta in bumt 
out of bur 


district, as 1 
nt district, 


«r aetUemeni 
as per settle 


with 
mcnt 


i Beappraisemcnl clau«o in Icoio waived in 1895, on condiUon that Chicago Dally Nowa 
Co. pay 6% on a valuaUon of $2,7,50 per foot frontage unUI May 8, 1900, and 0% 
on $3,000 per foot frontage during the remainder of life of leuo. 

t Reapprailemeat elauoe in leoao waived in 1895 on condition that annual rental be 
111,000 during renuinder of life of leoao. 



:m^m^ 



DEAR 5 OR N 



;3TREE.T. 



^ 





X 

o 






N> 



•'6' /^ 



III 

vLCf 



I 



St 

o 



AC^e^l/^ Z/^ /.£■ /Y/^A/^A/, 



/?SA/rAL. ro /^A y /SgS' '*V,3' S o o. o o 



■«-y 






© 



/p^A/7-A^ TO /^Ay ^ 00/ ^Socxn.GG 






n 

K CO 






0*5 

In 



OJ^ 










k) 










i 

00 



0) ^ 
R 



I 






^^^ 






M. 






^6 
^' 
'J 

N 





% i5 



J!^ to 






^■^' 



:^^fe°fe) 










/. £ASS SX^/J^£S - /^A y- S'/SSS"' y-^ 





> 

6) 


2 










-STATE. 



^TEEET. 



PROCEEDINGS OF THE BOARD OF EDUCATION 

RELATING TO THE APPOINTMENT OF 

APPRAISERS OF SCHOOL FUND 

PROPERTY. 

At a meeting of the Board of Education, held March 
18, 1905, the following proceedings and reports were 
adopted : 

The Committee on Buildings and Grounds respectfully 
reports that, whereas, at its regular meeting held Febru- 
ary 1, 1905, a certain report, which is in words and figures 
as follows, to wit : 

''Your Committee on Buildings and Grounds re- 
ports that, under and by virtue of the terms of cer- 
tain leases made and entered into by and between 
the Board of Education of the City of Chicago and 
certain lessees of School Fund properties, it is re- 
quired that an appraisement of said property be 
made for the purpose of fixing the ground rent for 
the same for a period of ten years from May 8, A. 
D. 1905; that the said leases contain the following 
provision for appraising said properties : 

"That, in lieu of the method of appointing ap- 
praisers for the purpose of ascertaining, determin- 
ing and fixing the amount of rent to be paid for 
said demised land, as provided in and by the terms 
of said lease and his supplement thereto, appraisers 
shall be appointed as follows : The Board of Edu- 
cation of the City of Chicago, and Judge holding 
the Circuit Court of the United States in and for 
the Northern District of Illinois for the time be- 
ing, and the judge of the Probate Court of Cook 
County, Illinois, or the sucessor of said Court hav- 
ing probate jurisdiction for the time being, shall 
each appoint one discreet male resident of the City 
of Chicago, not interested as lessee or mortgagee of 
school property in said city, to determine the true 
cash value of said demised land at the time of such 



appraisal, exclusive of the improvements thereon. 
The person appointed by the Board of Education 
shall be the Chairman of such appraisers and shall 
call their meetings and preside thereat. Any two of 
said appraisers shall have the power to make the 
appraisement." 

Your Committee, therefore, recommends that the 
Board of Education of the City of Chicago appoint 
John McLaren as its appraiser to fix the value of 
such School Fund properties and authorize and em- 
power the President of the Board of Education to 
request the Judge of the Circuit Court of the United 
States in and for the Northern District of Illinois, 
and the judge of the Probate Court of Cook County, 
Illinois, to each select an appraiser for the purpose 
of fixing the value of such School Fund properties, 
to the end that the rental value of said properties 
may be fixed and determined for the period com- 
mencing May 8, A. D. 1905, and ending May 7, A. 
D. 1915", 
was duly approved and adopted by the Board; and 

Whereas, at the regular meeting held by the Board of 

Education on February 15, 1905, there was received a 

communication from John McLaren, as follows: 

''Chicago, February 8, 1905. 
Hon. Clayton Mark, 

■ President Board of Education, Chicago. 
Deae Sik: — 

Yours of yesterday with copy of Action of Board 
of Education appointing me Appraiser for the Board 
of Education to act with Appraisers to be yet ap- 
pointed in the appraisement of School land, was duly 
received. 

I accept the appointment. As soon as I am noti- 
fied of the appointment of the other two appraisers 
I will organize the Commission and proceed to work. 
Yours very truly, 

John McLaren." 

And there was received also a communication from 



Charles S. Cutting, Judge of the Probate Court of Cook 
County, Illinois, as follows : 

^'February 11, 1905. 
Hon. Clayton Mark, 

President of Board of Education, 
Tribune Bldg., City. 
Dear Sie: — 

In accordance with your communication of the 6th 
inst., requesting me to make appointment of ap- 
praiser to serve under the provisions of certain re- 
valuation clauses in leases by the Board of Educa- 
tion to various parties, I have the honor of trans- 
mitting to you as my appointee to serve as such ap- 
praiser the Hon. Arba N. Waterman, late Judge of 
the Appellate Court for this District. 
Very respectfully yours, 

Charles S. Cutting, 
Probate Judge." 

And whereas, on March 1, 1905, at the regular meeting 
of the Board of Education of the City of Chicago, there 
was received from C. C. Kohlsaat, the Judge holding the 
Circuit Court for the Northern District of Illinois, a cer- 
tain communication, as follows : 

''Feb. 22, 1905. 
Hon. Clayton Mark, 

President Board of Education, Chicago. 
Dear Sir: — 

In pursuance of the authority vested in me by the 
agreement of the Board of Education with certain 
tenants of school lands, I hereby appoint Mr. El- 
bridge G. Keith as one of the appraisers in the cases 
submitted. 

Very truly yours, 
and C. C. Kohlsaat"; 

Whereas, it appears from the aforesaid that John Mc- 
Laren has been duly appointed as appraiser on behalf 
of the Board of Education of the City of Chicago to fix 
the ground rental values of School Fund properties held 
under certain leases made bv the Board of Education 



with certain lessees for a period of ten years from May 
8, 1905, and that Arba N. Waterman has been duly ap- 
pointed one of the appraisers by the Judge of the Pro- 
bate Court of Cook County, Illinois, and Elbridge Gr. 
Keith has been appointed one of the appraisers by the 
Judge now holding the Circuit Court for the Northern 
District of Illinois, and that the said three appraisers 
have each accepted the appointment, and that the terms 
of the leases for the property to be appraised have been 
in all things complied with relative to the appointment of 
appraisers for the fixing of the ground rent for said prop- 
erties for a period of ten years from May 8, 1905 ; and 

Whereas, the following list of properties appears to be 
subject to such appraisement under the terms of the leases 
for such properties ; 



LIST OF SCHOOL FUND PROPERTY 
To be Appraised on or before May 8, 1905. 



Location and Legal 
Description. 

N. E. corner Division and Sedg- 
wick Streets. 

South 264 ft. of Lot 207, Bron- 
son's Addition 

166-182 W. Madison Street, 
North Front. 

Lots 2-6, Block 1, School Sec- 
tion Addition 

S. E. Corner Madison and Hal- 

sted Streets. 
Lots 7, 8 and 9, Block 1, School 

Section Addition 

80-100 S. Halsted Street, West 

Front. 
Lots 11-15, Block 1, School 

Section Addition. . . .< 

80-100 S. Halsted Street, West 

Front. 
Lots 16-18, Block 1, School 

Section Addition 

181 W. Monroe Street, N. E. 

Cor. Monroe and Halsted Sts. 
19-20, Block 1, School Section 

Addition 

78 S. Halsted Street, West 

Front. 
Lot 10, Block 1, School Section 

Addition 

155-177 W. Monroe Street, South 

Front. 
Lot 21, Block 1, School Section 

Addition 

52-58 W. Jackson Blvd., North 

Front. 
E. i Lot 1, Block 52, School 

Section Addition 

60-66 W. Jackson Blvd., North 
Front on Jackson and West 
Front on Clinton. 

W. i, Lot 1, Block 52, School 
Section Addition 



Size. 



181 05 X 264 ft. 



125 X 100 ft. 



75 X 100 ft. 



125 X 150 ft. 



75 X 100 ft. 



61 65 X 100 ft. 



20 X 150 ft. . . 



204,92 X 189 ft. 
50 X 118.325 ft. 
34 X 100 ft 



50 X 80 025 ft. 



50 X 80 025 ft. 



Name and Address 
of Lessee. 



Board of Education, 
Tribune Building. 



C. H. Blair, 
175 Dearborn St. 



C. H. Blair, 
175 Dearborn St. 



C. H. Blair, 
175 Dearborn St. 



C. H. Blair, 

175 Dearborn St. 



C. H. Blair, 
175 Dearborn St 



Thomas Coughlan, 
915-184 LaSalle St. 



Board of Education, 
Tribune Building. 



John O'Malley, Jr., 
4542 State Street, 



Estate of Margaret 
Hurtz, Elbridge 
Hanecy, Admnr., 
1st Nat'l Bank 
Bldg. 



Location and Legal 
Description. 


Size. 


Name and Address 
of Lessee. 


330 S. Clark Street, East Front. 

N. i Lot 10, Block 113, School 

Section Addition 


25 X 105 33 ft. . . . 


Rand, McNally & Co 
Adams and LaSalle 

Sts 






332 S. Clark Street, East Front. 

S. i Lot 10, Block 113, School 

Section Addition 


25 X 105 33 ft.... 


C. W. Lasher, 
41 S. Clark St. 






136 S. State Street, East Front. 
Lot 3, Block 142, School Sec- 
tion Addition 


24 X 120 ft 


Jacob L. Kesner, 
The Fair, State & 
Adams Sts. 


146 State Street, East Front. 
Lot 7, Block 142, School Sec- 
tion Addition 


24 X 120 ft 


Estate of Henry Weil, 
Thomas G. Field, 
Trustee, 202 Broad 
way, N. Y. City, 
Estate of George 
Rounsavell, Violet- 
ta Rounsavell, Ex- 
trx., 146 State St. 




148 State Street, East Front. 
(Alley on south side of tot). 

Lot 8, Block 142, School Sec- 
tion Addition 


24 X 120 ft 


Rosalie Cavanna, 
H. 0. Stone & Co., 

Agents, 
206 LaSalle St 






78-84 Madison Street, North 
Front. (Alley on two sides 
and South end. 

Lots 9, 10 and 11, Block 142, 
School Section Addition 


81 48 X 192 ft 


McVicker Theatre 
Co., 

78 Madison St. 


151-153 Dearborn Street, West 
Front. (Alley on South side 
of Lot 19.) 

Lots 18-19, Block 142, School 
Section Addition 


48x120 ft 


James K. Sebree, 
Saratoga Hotel, 
Chicago; 






155-157 Dearborn Street, West 
Front. (Alley on North side 
of Lot 20.) 

Lots 20-21, Block 142, School 
Section Addition 


48x120 ft 


Estate of Alice F. 

Chambers and Ava 

W. Farwell, 
J. A. Farwell, Agent, 

128 Madison St 






167-171 Dearborn Street, West 
Front. (Monroe Street south 
of Lot 27.) 

S. 8 ft. of Lot 23, and all of Lots 
24-27, Block 142, School 
Section Addition 


104 X 120 ft 


Daniel F. CriUy, 
167 Dearborn St., 


150-152 S. State Street, East 
.Front. (Alley on north side 

of Lot 31.) 
Lots 31-32, Block 142, School 

Section Addition 


- 48 X 120 ft 


Stumer, Rosenthal & 
Eckstein, 

152 S. State St. 



Location and Legal 
Description. 



154 S. State Street, East Front. 
Lot 33, Block 142, School Sec- 
tion Addition 



156 S. State Street, East Front. 
Lot 34, Block 142, School Sec- 
tion Addition 



163 N. Desplaines Street, West 

Front. 
N. ^ Lot 14, Block 60, Russel, 

Mather & Roberts' Addition. 



Size. 



24 


X 120 ft 


24 


X 120 ft 


20 


X 150 ft 



Name and Address 
of Lessee. 



Estate of George B. 
Jenkinson, R. C. 
Jenkinson, Surviv- 
ing Executor, 
Newark, N. J. 



A. Bishop & Co., 
156 S. State Street. 



Wacker & Birk Brew- 
ing and Malting 
Company, 
163 N. Desplaines 
Street. 



Whereas, it is necessary that the said appraisers do at 
once proceed to determine and fix the ground rental 
values of the properties in the foregoing list for a period 
of ten years from May 8, 190'5 ; 

Your Committee, Therefore, Recommends, 

That tlie appointment of said three appraisers be con- 
curred in and affirmed, and that they be requested and 
directed at once to proceed to fix the ground rental values 
for the properties set forth in the foregoing list in ac- 
cordance with the terms of the respective leases made be- 
tween the Board of Education of the City of Chicago and 
the lessees of such properties for a period of ten years 
commencing on May 8, 1905, and ending on May 7, 1915, 
and that the Secretary of the Board of Education of the 
City of Chicago be directed to, on behalf of the Board 
of Education, notify each of the lessees of said proper- 
ties of the apx)ointment of said three appraisers, giving 
their respective names and addresses and the name of 
the party appointing them. 

"Your Committee on Buildings and Grounds reports 
that under certain leases between the Board of Educa- 
tion of the City of Chicago and the lessees of certain 



properties, it is provided that an appraisement be made 
to fix the ground rental value of said properties for a 
period of ten years, commencing May 8, 1905, and that 
each of said leases contains the following provisions, to 
wit: 

'In case either of the persons, his successor or succes- 
sors, appointed by any judge holding said Circuit Court 
of the United States, or by the judge of the Probate Court 
of Cook County, or the successor of said court having pro- 
bate jurisdiction, shall die or resign before an appraise- 
ment is made, and in case either of said persons, or the 
successor or successors of them, or either of them, shall 
neglect, omit or refuse to act as appraiser, or to make or 
report an appraisement in accordance with the purport 
and intention of said lease, and this supplement thereto, 
the Board of Education, upon evidence satisfactory to 
itself, may remove such person or persons for such neg- 
lect, omission or refusal to act as appraiser, or to make 
or report an appraisement, and the vacancy or vacancies 
so occurring, either by death, resignation or removal, 
shall, on the request of either of the parties hereto, be 
filled within ten days after such request by the appoint- 
ment of another person by the judge whose appointee has 
died or resigned or has been removed. And the person 
so aj)pointed to fill such vacancy shall, in every case, have 
the same power and authority to make said appraisement 
as if he had been appointed appraiser in first instance.' 

Your committee, therefore, recommends that in case of 
any vacancies occurring by reason of any of the afore- 
said causes, the President of the Board of Education of 
the City of Chicago be authorized and empowered to re- 
quest the judge having the power to fill such vacancy to 
appoint another person to act as appraiser in accordance 
with the terms of the leases." 



No objections having been made to tlie recommenda- 
tions contained in the above report, the report was re- 
ceived and the recommendations contained therein were 
adopted. 

Yeas — 14. 

Nays — None. 

Proceedings of Board March 18, 1905, pp. 533-36. 

IN REFERENCE TO APPOINTMENT OF WILLIAM 
D. KERFOOT. 

At a meeting of tlie Board of Education held March 29, 
1905, the Secretary presented the following communica- 
tion from the President of the Board : 

Chicago, March 29, 1905. 
To the Board of Education, City of Chicago. 
Ladies and G-ENTLEMEisr : — 

I hand you herewith communication from Hon. C. 
C. Kohlsaat, Judge of the United States District 
Court, dated March 20th, advising that Mr. E. Gr. 
Keith is unable to serve as appraiser, owing to his 
recent illness; also letter of March 22nd from Judge 
Kohlsaat advising of the appointment of Mr. Wm. D. 
Kerfoot to fill the vacancy caused by the resignation 
of Mr. Keith, and Mr.Kerfoot's letter of acceptance. 
Yours very truly, 

. Clayton Mark, 
President. 

March 20, 1905. 
Mr. Clayton Mark, 

Pres. Board of Education, 
Chicago. 
Dear Sir : — 

The enclosed letter from Mr. Keith has reached 
me, stating that he is sick and therefore unable to 
act as appraiser of school property. 

I will select some one in his stead at once and ad- 
vise you. 

Very truly yours, 

C.C. Kohlsaat. 
Enc. 



10 

1900 Prairie Avenue, 
Mcli. 13th, '05. 
Deae Judge : 

I regret to say that since by your partiality I was 
appointed an appraiser of school fund property I 
have been confined to my home by illness. 

I trust it is not serious, but I do not feel that it is 
justice to the work assigned that it should be de- 
layed and am therefore obliged to ask to be excused 
from the service and that you will name some one 
else to fill the position. 

Thanking you sincerely for the confidence you have 
expressed in selecting me, I am, 

Sincerely yours, 

E. G. Keith. 

Hon C. C. Kohlsaat, 

Judge of the U. S. District Court. 

March 22, 1905. 
Hon. Clayton Mark, 

Pres. Board of Education, 
Chicago. 
Deae Sie : — 

It now appears that Mr, Lackner resides at Kenil- 
worth, Illinois, and therefore outside of the City of 
Chicago, and under the terms of the lease is dis- 
ciualified to act as appraiser. 

I have the honor to advise you that I have ap- 
pointed Mr. Wm. D. Kerfoot to that position, and 
that he has consented to act. 

Very truly yours, 

C. C. Kohlsaat. 

Chicago, March 25, 1905. 
Hon, Clayton Marie, 

President Board of Education of the 
City of Chicago, City. 
My Deae Me. Maek : 

Your favor of the 24th inst. at hand. 
Judge Kohlsaat advised me by telephone on the 
21st inst. of my appointment as an appraiser to ap- 
praise certain school lands, which appointment I then 
accepted, and now confirm my acceptance. 



11 

T have qualified as appraiser and handed my quali- 
fication papers to Mr. McLaren, the chairman of the 
Committee of Appraisers, and have since had several 
meetings with the Committee. 

Yours very truly, 

Wm. D. Kerfoot. 

Received and ordered printed in the proceedings. 
Proceedings of Board, March 29, 1905, pp. 549-50. 



ORIGINAL OATH OF APPRAISERS. 

State of Illinois, 
County of Cook. 

Whereas under the conditions of certain supplemental 
leases between the Board of Education of the City of 
Chicago and certain lessees of School Fund Property the 
Board of Education of the City of Chicago has appointed 
John McLaren, the Honorable Christian C. Kohlsaat, 
Judge of the Circuit Court of the United States for the 
Northern District of Illinois, has appointed Eldridge G. 
Keith and The Honorable Charles S. Cutting, Judge of 
the Probate Court of Cook County, has appointed Arba 
N. Waterman, three discreet male residents of the City 
of Chicago, not interested as lessees, or mortgagees of 
School Property in said City, to determine, on their oath 
first duly taken, the true Cash Value of each of the lots 
or parcels of lands hereinafter described, exclusive of the 
improvements thereon. 

Now therefore, each of the subscribed being first duly 
sworn according to law, each for himself deposes and says 
that he is a resident of the said City of Chicago, that he 
is not interested as lessee or mortgagee of any of the 
properties hereinafter mentioned or of any other school 



12 

property in said City of Chicago, and that he together 
with the other subscribers hereto will faithfully, impar- 
tially, and to the best of his ability appraise and deter- 
mine the true Cash Value at the time such appraisal shall 
be made, exclusive of the improvements thereon of each 
and every of the following described lots, pieces or par- 
cels of land situate in the County of Cook and State of 

Illinois." 

John McLaren^ 

Elbeidge Gr. Keith, 

Area N. Waterman. 

Subscribed and sworn to before me this sixth day of 

March, 1905. 

Henry J. Tansley, 

Notary Public. 

Certificate of County Clerk attached as to magistracy 
of Henry J. T'ansley, 

OATH TAKEN BY WILLIAM D. KERFOOT. 

State of Illinois, 



ss 
County of Cook. ) 

Whereas, under the conditions of certain supplemental 
leases, between the Board of Education of the City of 
Chicago and certain lessees of School Fund Property, the 
Board of Education of the City of Chicago appointed 
John McLaren. The Honorable Christian C. Kohlsaat, 
Judge of the Circuit Court of the United States for the 
Northern District of Illinois, appointed Elbridge G. 
Keith, and the Honorable Charles S. Cutting, Judge of 
the Probate Court of Cook County, appointed Arba N. 
AVaterman, — three discreet male residents of the City 



13 

of Chicago, not interested as lessees or mortgagees of 
School Property, in said City to determine on their oath 
first duly taken, the true cash value of each of the lots or 
parcels of lands hereinafter described, exclusive of the 
improvements thereon, and — Whereas the said John Mc- 
Laren, Elbridge Gr. Keith and Arba N. Waterman did 
cjualify to act as such appraisers by making oath to per- 
form the duties assigned them and 

Whereas on account of ill-health, Elbridge G. Keith did 
resign and refuse to act any longer as such appraiser, 
and — Whereas under the conditions of said supplemental 
leases before referred to the Honorable Christian C. 
Kohlsaat, Judge of the Circuit Court of the United States 
for the Northern District of Illinois, on the 22d day of 
March, 1895, did appoint in place of Elbridge G. Keith, 
resigned, William D. Kerfoot, a discreet male resident 
of the City of Chicago, not interested as lessee or mort- 
gagee of School property in said city, to determine on 
his oath first duly taken, together with the said John Mc- 
Laren and Arba N. Waterman, the true cash value of 
each of the lots or parcels of lands hereinafter described, 
exclusive of the improvements thereon. 

Now therefore the said William D. Kerfoot being first 
duly sworn according to law deposes and says, that he is 
a resident of the said City of Chicago, that he is not in- 
terested as lessee or mortgagee of any of the properties 
liereinafter mentioned or of any other school property in 
said City of Chicago and that he together with the ap- 
praisers already qualified, namely, the said John Mc- 
Laren and Arba N. Waterman, will faithfully, impartial- 
ly and to the best of his ability, appraise and determine 
the true Cash Value at the time such appraisal shall be 
made exclusive of the improvements thereon of each and 



14 

every of the following described lots, pieces or parcels of 
land situate in the County of Cook and State of Illinois. 

William D. Kerfoot. 

Subscribed and sworn to before me this 24th day of 

March, 1905. 

Max Kortum^ 

(Seal) Notary Public. 

Certificate of County Clerk attached as to magistracy 
of Max Kortum. 

SUBSEQUENT OATH OF JOHN McLAREN, AREA 
N. WATERMAN AND WILLIAM D. KERFOOT. 

State of Illinois, ) 
County of Cook. \ ' 

Whereas, We, John McLaren and Arba N. Waterman, 
duly appointed appraisers to determine the true cash 
value of certain lots and parcels of land hereinafter de- 
scribed, exclusive of the improvements thereon, under cer- 
tain leases and supplements thereto between the Board 
of Education of the City of Chicago and certain leases of 
school fund property, did, in conjunction with Elbridge 
(jr. Keith, who was also duly appointed as such appraiser, 
but who has since resigned, on the 6th day of March, A. 
D. 1905, take the following oath. 

"State of Illinois, ) 
County of Cook. \ 

Whereas, under the conditions of certain supple- 
mental leases between the Board of Education of the 
City of Chicago and certain lessees of school fund 
property, the Board of Education of the City of Chi- 



15 

cago has appointed John McLaren, the Honorable 
Christian C. Kohlsaat, Judge of the Circuit Court of 
the United States for the Northern District of Illi- 
nois, has appointed Elbridge G. Keith, and the Hon- 
orable Charles S. Cutting, Judge of the Probate 
Court of Cook County, has appointed Arba N. Wa- 
terman, three discreet male residents of the City of 
Chicago, not interested as lessees or mortgagees of 
school property in said city, to determine, on their 
oath first duly taken, the true cash value of each of 
the lots or parcels of land hereinafter described, ex- 
clusive of the improvements thereon. 

Now, Therefore, each of the subscribed being duly 
sworn according to law, each for himself deposes and 
says that he is a resident of the said City of Chi- 
cago, that he is not interested as lessee or mortgagee 
of any of the properties hereinafter mentioned, or of 
any other school property in said City of Chicago, 
and that he, together with the other subscribers here- 
to, will faithfully, impartially and to the best of his 
ability appraise and determine the true cash value 
at the time such appraisal shall be made, exclusive of 
the improvements thereon, of each and every of the 
following lots, pieces and parcels of land situate in 
the County of Cook and State of Illinois. 
Signed John McLaeen, 
Signed Elbeidge Gt. Keith, 
Signed Area N. Wateeman. 

Subscribed and sworn to before me this 6th day of 
March, 1905. 

Signed Heney J. Tansley, 
(Seal affixed) Notary Public." 



16 

And Whereas, thereafter the said Elbridge G. Keith 
resigned as such appraiser, and William D. Kerfoot was 
duly appointed appraiser in lieu of said Elbridge G. 
Keith, all under the provision^ of the aforesaid leases; 

And Whereas, the said William D. Kerfoot, as such 
appraiser did, on the 24th day of March, A. D. 1905, take 
the following oath: 

''State of Illiistois, ) 
County of Cook. ) 

Whereas, under the conditions of certain supple- 
mental leases between the Board of Education of the 
City of Chicago and certain lessees of school fund 
property, the Board of Education of the City of Chi- 
cago appointed John McLaren, the Honorable Chris- 
tion C. Kohlsaat, Judge of the Circuit Court of the 
United States for the Northern District of Illinois, 
appointed Elbridge G. Keith, and the Honorable 
Charles S. Cutting, Judge of the Probate Court of 
Cook County, appointed Arba N. Waterman, three 
discreet male residents of the City of Chicago, not 
interested as lessees or mortgagees of school fund 
property in said city, to determine, on their oath first 
duly taken, the true cash value of each of the lots or 
parcels of land hereinafter described, exclusive of 
the improvements thereon ; and 

Whereas, the said John McLaren, Elbridge G. 
Keith and Arba N. Waterman, did qualify to act as 
such appraisers by making oath to perform the du- 
ties assigned them; and 

Whereas, on account of ill-health, • Elbridge G. 
Keith did resign and refuse to act any longer as such 
appraiser; and 

Whereas, under the conditions of said supplemental 
leases before referred to, the Honorable Christian 
C. Kohlsaat, Judge of the Circuit Court of the United 
States for the Northern District of Illinois, on the 
22nd day of March, A. D. 1905, did appoint, in place 
of Elbridge G. Keith, resigned, William D. Kerfoot, 
a discreet male resident of the City of Chicago, not 



17 

interested as lessee or mortgagee of school property 
in said city, to determine on his oath first duly taken, 
together with the said John McLaren and Arba N. 
Waterman, the true cash value of each of the lots or 
parcels, of land hereinafter described, exclusive of 
the improvements thereon. 

Now, Therefore, the said William D. Kerfoot be- 
ing first duly sworn according to law, deposes and 
says he is a resident of the said City of Chicago; 
that he is not interested as lessee or mortgagee of 
any of the properties hereinafter mentioned, or of 
any other school property in said City of Chicago, 
and that he, together with the said John McLaren 
and Arba N. Waterman, will faithfully, impartially 
and to the bes.t of his ability, appraise and determine 
the true cash value at the time such appraisal shall 
be made, exclusive of the improvements thereon, of 
each and every of the following described lots, pieces 
or parcels of land situate in the County of Cook and 
State of Illinois. 

Signed Wikliam D. Keefoot. 

Subscribed and sworn to before me this 24th day 
of March, 1905. 

Signed Max Koktum, 
(Seal affixed.) Notanj PiMic." 

And Whereas, the aforesaid John McLaren, Arba N. 
Waterman and William D. Kerfoot, the present duly ap- 
pointed appraisers of the fees, in the lands covered by 
the leases aforesaid, deem it not inappropriate to make 
and take an additional oath at this time, prior to the time 
that they, as said appraisers, have made any appraise- 
ment of any of the fees as aforesaid. 

Now, Therefore, each of said last mentioned apprais- 
ers does make and take oath in the premises, as follows : 



IS 
State of Illinois, 



County of Cook. '' 

Wliereas, under tho conditions of certain supplemen- 
tal leases between the Board of Education of the City of 
Chicago and certain lessees of school fund property, the 
Board of Education of the City of Chicago has appointed 
John McLaren, the Honorable Christian C. Kohlsaat, the 
judge holding the Circuit Court of the United States for 
the Northern District of Illinois, has appointed William 
D. Kerfoot, and the Honorable Charles S. Cutting, Judge 
of the Probate Court of Cook County, has. appointed 
Arba N. Waterman, three discreet male residents of the 
City of Chicago, not interested as lessees or mortgagees 
of school property in said city, to determine, on their 
oath first duly taken, the true cash value of each of the 
lots or parcels of land hereinafter described, exclusive 
of the improvements thereon: 

Now, Therefore, each of the subscribers, being first 
duly sworn according to law, each for himself deposes 
and says that he is a resident of the said City of Chicago ; 
that he is not interested as lessee or mortgagee of any 
of the properties hereinafter mentioned, or of any other 
school property in said City of Chicago, and that he, to- 
gether with the other subscribers hereto, will faithfully, 
impartially and to the best of his ability, appraise and 
determine the true cash value at the time such appraisal 
shall be made of each and every of the following de- 
scribed lots, pieces and parcels of land, exclusive of the 
improvements thereon, situate in the County of Cook and 
State of Illinois, to wit : 



19 



Location and Legal 
Description. 


Size. 


Name and Address 
of Lessee 


N. E. Corner Division and 

Sedgwick Streets. 
South 264 ft. of Lot 207, Bron- 

son's Addition 


181. 05x264 ft.... 


Board of Education, 
Tribune Building. 


166-182 W. Madison Street, 

North Front. 
Lots 2-6, Block 1, School Sec- 
tion Addition 


125 X 100 ft 


C. H. Blair 

175 Dearborn St. 


S. E. Corner Madison and Hal- 

■ sted Streets. 
Lots 7, 8 and 9, Block 1 School 
Section Addition 


75 X 100 ft 


C. H. Blair, 
175 Dearborn St. 


80-100 S. Halsted Street, West 

Front. 
Lots 11-15, Block 1, School 

Section Addition 


125 X 150 ft 


C. H. Blair, 
175 Dearborn St. 


80-100 S. Halsted St., West 

Front. 
Lots 16-18, Block 1, School 

Section Addition 


75 X 100 ft 


C. H. Blair, 

175 Dearborn St. 








181 W. Monroe Street, N. E, 
Cor. Monroe and Halsted 
Streets. 

Lots 19-20, Block 1, School 
Section Addition 


61 65 X 100 ft 


C. H. Blair, 
175 Dearborn St. 


78 S. Halsted Street, West 

Front. 
Lot 10, Block 1, School Section 

Addition 


20x150 ft 


Thomas Coughlan, 
915-184 LaSalle St. 


155-177 W. Monroe Street, South 

Front. 
Lot 21, Block 1, School Section 

Addition 


204. 92 X 189 ft.... 
50 X 118.325 ft.... 
34x100 ft 


Board of Education, 
Tribune Building. 


52-58 W. Jackson Blvd., North 

Front. 
E. i Lot 1, Block 52, School 

Section Addition 


50x80.025 ft 


John O'Malley, Jr., 
4542 State Street. 


60-66 W. Jackson Blvd., North 
Front on Jackson, and West 
Front on Clinton. 

W. i Lot 1, Block 52, School 
Section Addition 


50x80.025 ft 


Estate of Margaret 
Hurtz, Elbridge 
Hanecy, Admr., 
1st Nat'l Bank 
Bldg. 


330 S. Clark St., East Front. 
N. ^, Lot 10, Block 113, School 
Section Addition 


25 X 105.33 ft 


Rand,McNally&Co. 
Adams and LaSalle 
Sts. 



20 



Location and Legal 
Description. 


Size. 


Name and Address 
of Lessee. 


332 S. Clark Street, East Front. 

S. h Lot 10, Block 113, School 

Section Addition 


25x105.33 ft 


C. W. Lasher, 
41 S. Clark St. 


136 State Street, East Front. 
Lot 3, Block 142, School Sec- 
tion Addition 


24 X 120 ft 


Jacob L. Kesner, 
The Fair, 
State & Adams 
Sts. 


146 S. State Street, East Front. 
Lot 7, Block 142, School Sec- 
tion Addition 


24 X 120 ft 


Estate of Henry Weil 
Thos. G. Field, 
Trustee, 202 Broad- 
way, N. Y. City, 

Estate of George 




Rousnavall, 146 

State St, 


148 S. State Street, East Front. 
(Alley on South side of Lot.) 

Lot 8, Block 142, School Sec- 
tion Addition 


24x120 ft 


Rosalie Cavanna, 
H. 0. Stone & Co., 

Agents, 
206 LaSalle St. 






78-84 Madison Street, North 
Front. (Alley on two sides 
and South End.) 

Lots 9, 10 and 11, Block 142, 
School Section Addition 


81 48 X 192 ft 


McVicker Theatre 
Co., 
.78 Madison St. 


151-153 Dearborn Street, West 
Front. Alley on south side 
of Lot 19. 

Lots 18-19, Block 142, School 
Section Addition 


48 X 120 ft 


James K. Sebree, 
Saratoga Hotel, 
Chicago. 






155-157 Dearborn Street, West 
Front. (Alley on North side 
of Lot 20.) 

Lots 20-21, Block 142, School 
Section Addition 


48 X 120 ft 


Estate of Alice Cham- 
bers and Ava W. 
Farwell, 

J. A. Farwell, Agent, 
128 Madison St. 


167-171 Dearborn Street, West 
Front. (Monroe St., South 
of Lot 27.) 

S. 8 ft. of Lot 23, all of Lots 24- 
27, Block 142, School Section 
Addition 


104 X 120 ft 


Daniel F. Crilly, 
167 Dearborn St. 


150-152 S. State Street, East 
Front. (Alley on North side 
of Lot 31.) 

Lots 31-32, Block 142, School 
Section Addition 


48x120 ft 


Stumer, Rosenthal & 
Eckstein, 
152 tate Street. 


154 S. State St., East Front. 
Lot 33, Block 142, School Sec- 
tion Addition 


24x120 ft 


Estate of George B. 
Jenkinson, 
Newark, N. J. 



21 



Location and Legal 
Description. 


Size. 


Name and Address 
of Lessee. 


156 S. State Street, East Front. 
Lot 34, Block 142, School Sec- 
tion Addition. 


24 X 120 ft 


A. Bishop & Co., 
156 State Street. 






163 N. Despjaines Street, West 

Front. 
N. i. Lot 14, Block 60, Russell, 

Mather & Roberts Addition. 


20 X 150 ft 


Wacker & Birk 
Brewing Co., 
163 N. Desplaines 
Street. 



JOHN McLaren, 

AREA N. WATERMAN, 
WILLIAM D. KERFOOT. 

Subscribed and sworn before me this 18th day of April, A. D., 1905: 

JULIUS C. MATTHIS, 

Notary Public. 



NOTICE SENT TO BOARD OF EDUCATION BY 
BOARD OF APPRAISERS. 

At a meeting of the Board of Education held March 
29, 1905, the following report was received: 

The Committee on Buildings and Grrounds reports that 
it is. in receipt of the following communication addressed 
to the President of the Board, from recently appointed 
appraisers of school fund lands ; that it has duly consid- 
ered the matter, and recommends that the President of 
the Board be empowered to employ such help as may be 
necessary, in connection with the proposed appraise- 
ments, in order to properly protect the interests of the 
Board. The following is the communication above re- 
ferred to : 



22 

"March 7, 1905. 
Hon. Clayton Marh, 

President Board of Education, 
City of Chicago, 

Tribune Building. 
My Dear Sir : 

Take notice that John McLaren, Elbridge G. Keith 
and Arba N. Waterman have been duly appointed 
appraisers to determine the true cash value of cer- 
tain lease lands at the time of such appraisal for 
the purpose of determining the annual rental there- 
of as is provided in the lease and supplemental leases 
of said real estate from the Board of Education of 
the City of Chicago to certain lessees thereof. 

The said appraisers have duly qualified as such 
and will meet in the office of E. Gr. Keith, Esq., pres- 
ident of the Cliicago Title and Trust Company, in its 
building, 100 Washington Street, Chicago, on Mon- 
day, the 13th day of March, 1905, at 3 o'clock p. m., 
and will continue in sessions from time to time, as 
may be hereafter fixed upon until said appraise- 
ments are determined, when and where you may at- 
tend if you see fit. 

Any papers or statements, connected with the ap- 
praisement that you may wish to submit for the con- 
sideration of the appraisers may be sent to Apprais- 
ers of School Fund Lands, care E. Gr. Keith, Esq., 
Chicago Title and Trust Company, 100 Washington 
Street, Chicago. 

John McLaeen, 
Elbeidge Gr. Keith, 
Arba N. Waterman, 
Appraisers of School Fund Lands, 
By John McLare-n, 

Chairman.'' 
Proceedings of Board, March 29, 1905, p. 558. 



23 



PROTESTS AND OBJECTIONS TO APPOINTMENT 
OF APPRAISERS FILED BY 

Estate Geo. B. Jeistkinson, 
Estate Henry Weil, 
Estate Geo. Rounsavell, 
Louis Stumer, 
Jacob L. Kesner, 
Benj. J. Rosenthal, 
A. Bishop & Co., 

By Levy Mayer and Donald L. Morrill, their attor- 
neys. 

(Each protest being in the same language except the 
description of the property in the last paragraph.) 

Chicago, March 29, 1905. 

Messrs. John McLaren, Arha N. Waterman and William 
D. Kerfoot. 

Gentlemen : 

The undersigned, being a lessee of the Board of Edu- 
cation of the City of Chicago, and owning under a cer- 
tain lease and supplemental lease from said Board of 
Education the leasehold interest hereinafter more spe- 
cifically stated, in response to your notice dated March 
24th, 1905, informing the undersigned that you have been 
appointed appraisers of the real estate mentioned in said 
notice and hereinafter more specifically referred to, for 
the purpose of preserving and protecting the rights se- 
cured to the undersigned by law and by the terms and 
provisions of said lease and supplemental lease, hereby 
protests and objects that you have neither jointly nor 
severally any jurisdiction or legal right to act as apprais- 



24 

ers in the premises for the following, among other rea- 
sons. : 

1. That you have not been legally or properly ap- 
pointed appraisers. 

2. That you have not been appointed according to or 
in compliance with the provisions of the said lease and 
supplemental lease from said Board of Education. 

3. That said John McLaren was not properly or le- 
gally appointed or designated by the said Board of Edu- 
cation as an appraiser in the premises, and does not pos- 
sess the qualifications specified in said lease and supple- 
mental lease, and is disqualified to act. 

4. That said William D. Kerfoot was not properly or 
legally appointed or designated by the Honorable Chris- 
tian C. Kohlsaat as ah appraiser in the premises, and 
does not possess the qualifications specified in said leas.e 
and supplemental lease, and is disqualified to act. 

5. That said Arba N. Waterman was not properly or 
legally appointed or designated by the Honorable Charles 
S. Cutting as an appraiser in the premises, and does, not 
possess the qualifications specified in said lease and sup- 
plemental lease, and is disqualified to act. 

6. That no warrant, certificate, or other document 
has been issued by said Board of Education to you, or 
any of you, legally or properly specifying the duties to 
be performed by you, or any of you, or authorizing you, 
or any of you, to discharge any duties whatever with ref- 
erence to the parcel of real estate hereinafter described. 

7. That the action of said Honorable Christian C. 
Kohlsaat in appointing said William D. Kerfoot as such 
appraiser was not had or taken in conformity with or as 



25 

required by the terms and provisions of the said lease 
and supplemental lease. 

8. That the Honorable Christian C. Kohlsaat first un- 
dertook to and did appoint and designate Elbridge G. 
Keith to act as appraiser in the premises ; that there- 
after said Elbridge G. Keith resigned before an appraise- 
ment was undertaken or made in the premises; that the 
right and power on the part of said Honorable Christian 

C. Kohlsaat to appoint a successor to said Elbridge G. 
Keith depended upon the performance of and compliance 
with certain conditions precedent, required by said lease 
and supplemental lease, which were not performed nor 
complied with, and that the apointment of said William 

D. Kerfoot was and is void. 

9. That the said Honorable Christian C. Kohlsaat, at 
the time of making or purporting to make the said ap- 
pointment of William D. Kerfoot, was not a judge hold- 
ing the Circuit Court of the United States, as required 
by the ternis and provisions of said lease and supple- 
mental lease. 

10. That the action of said Honorable Charles S. Cut- 
ting in appointing said Arba N. Waterman as such ap- 
praiser was not had or taken in conformity with or as 
required by the terms and provisions of said lease and 
supplemental lease. 

11. That neither the said Honorable Christian C. 
Kohlsaat nor said Honorable Charles S. Cutting had any 
legal right, power or authority to designate or appoint 
the said William D. Kerfoot and Arba N. Waterman, re- 
spectively, and that no legal or proper appointment of 
said William D. Kerfoot or Arba N. Waterman, respect- 
ively, was made in the premises. 



26 

12. That you, and none of you, have taken the neces- 
sary or proper oath for the purpose of qualifying you to 
act as such appraisers. 

13. That the oath of office, if any such oath of office 
was taken by you, does not obligate you to specifically 
make a fair and impartial appraisal of the parcel of real 
estate hereinafter described, in accordance with the terms 
and provisions of said lease and supplemental lease. 

14. That the said notice of March 24, 1905, is infor- 
mal and defective so far as it relates to the undersigned, 
and is not a proper and sufficient notice under the terms 
and provisions of s.aicl lease and supplemental lease. 

15. That there is and was no compliance with the 
terms and provisions of said lease and supplemental 
lease in the attempted designation and appointment of 
all or any of you as appraisers, and that you, and each 
of you, are without jurisdiction to proceed with the pro- 
posed appraisal, and that the said appointment of you, 
and each of you, was and is, void, and any proceeding 
which may be had or taken by you, or any of you, in that 
behalf, will be illegal and void. 

The parcel of land and leasehold interest therein, here- 
inbefore referred to and covered by this protest is Lot 
Seven (7), in Block One Hundred and Forty-two (142), 
School Section Addition to Chicago, Cook County, Illi- 
nois, otherwise known as 146 State Street. 



27 



PROCEEDINGS BEFORE BOARD OF APPRAIS- 
ERS. 

McVICKER THEATRE CO. 

Statement of Dtjpee, Judah, Willaed & Wolf, Attor- 
neys FOE McVickee Theatee Co. 

Lots 9, 10 and 11, in Block 142 in the School Section 
Addition to Chicago. 



1. The above premises are those upon which stand 
the Mcyicker Theatre building. 

2. Said premises have a north frontage of eighty-one 
and forty-eight hundredths (81.48) feet on Madison 
street by a depth of one hundred and ninety-two (192) 
feet. The premises are surrounded on the East, South 
and West, respectively, by alleys fifteen (15) feet in 
width. 

3. The present lease was made in May, 1880, to Har- 
riet G. McVicker who transferred it, with the consent of 
the lessor, to the present owner. The McVicker Theatre 
Company. It was originally for a term of fifty (50) 
years from May 8, 1880, with provision for re-appraise- 
ment every five years. On June 15, 1888, a supplement 
to said lease was executed between the parties which ex- 
tended the term to May 8, 1985, and provides for re-ap- 
praisement every ten years. The lessee is now paying 
an annual ground rent of $27,000. 

4. For convenience, correct copies of said lease and 
supplemental lease have been printed and are hereto at- 
tached for reference. 



28 

5. The present building was erected shortly after the 
Great Fire and is of the construction usual at that time, 
when a very great amount of building was proceeding; 
when great haste was a part of all operations, and the 
methods, workmanship and construction were respec- 
tively far less careful and lasting than now. In the year 
1891, the building was badly injured by fire, and at that 
time and from time to time thereafter has been the sub- 
ject of many changes and repairs. 

6. The front part of the building, viz : that part ex- 
tending from Madison street back a depth of forty-one 
(41) feet is, barring the theatre entrance, constructed 
and used for offices with two narrow and shallow stores 
on the street level. Under each store there is a small 
basement space which is rented out and the remainder 
of the basement is necessarily used in connection with 
the theatre. The space in the rear of the front forty-one 
(41) feet is used for theatre purposes, except that a tier 
of offices on the fifth and sixth floors is carried back on 
steel construction over the auditorium of the theatre, 
about ninety (90) feet, furnishing twenty-five offices. 
With respect to the whole of the office portion of the 
building it is to be said that it is of such construction and 
so hampered by the theatre entrances and the necessarily 
small elevator space that it is not even fairly to be called 
second class; even a hasty examination by one experi- 
enced in such matters, of the office portion of this build- 
ing, will satisfy him that even without further compensa- 
tion in office space in this city, the office portion of this 
building cannot be rented on a better than third class 
basis. Investigation of th-e building upon this subject is 
earnestly invited. Offices in this building are rented at 
a rate as low as seven dollars ($7) a month. The gross 



29 

annual income from the building at the present time is 
$57,948.27. The annual expenses for carrying the prop- 
erty, including the ground rent of $27,000 are $47,281.40, 
leaving a net annual income of $10,166.87. 

Said expenses are stated by the secretary as follows: 

(1) Ground rent to Board of Education $27,000.00 

(2) Salaries of superintendent, janitor, two 

elevator boys and two scrub women. . 4,316.00 

(3) General expenses, including supplies and 

repairs to the office portion of the 
building 7,563.06 

(4) Insurance 6,720.32 

(5) Taxes for 1903, on leasehold and build- 

ing 2,182.02 

Aggregate $47,781.40 

But in the foregoing nothing is included for repairs to 
the exterior or for depreciation. 

7. The Lessee is a corporation under the laws of Illi- 
nois; its whole capital stock has been invested in this 
building. By virtue of the late amendments to the city 
ordinances respecting the construction of theatres the 
company was compelled to borrow and spend a large 
sum of money during last year in order that the theatre 
might be used at all; for this indebtedness the company 
is now obligated. It is utterly beyond its power to ob- 
tain and further money wherewith to construct a new 
and modern building when its only property consists of 
this old building and a leasehold subject to re-appraisal 
every ten years. No argument seems necessary on this 
point. All experienced business men will concede the 
statement. It is also a matter of common knowledge that 
this tenant, along with other tenants of neighboring 
school property, for months at a time urged upon the 



30 

school board the desirability of fixing the rent at a defi- 
nite sum, in order that new improvements might be pos- 
sible, and that such application to the school board has 
been utterly without avail. 

8. Under this situation the Lessee turns to the supple- 
mental lease of June 15, 1888, paragraph sixth of which 
is as follows : 

"Sixth. That, notwithstanding anything in said 
lease contained, the appraisers shall be at liberty in 
forming their judgment of the value of the land, 
without including the value of the improvements 
thereon, to take into consideration, if and so far as 
they deem it pertinent to do so, the improvements 
on such land, and the character, condition, value, 
cost, rental, expenses, and other particulars thereof, 
and any other facts or information, from whatever 
source, bearing upon the question of the actual value 
of said land ; and it shall be the duty of the lessee to 
furnish the appraisers promptly, on request, a state- 
ment showing the rental, receipts and disbursements 
on account of said improvements for five years, as 
near as may be, next preceding the time of the ap- 
praisement. ' ' 

The Lessee insists that notwithstanding anything that 
has been said or done or anything that can be said or 
done, this paragraph sixth was by the parties intended to 
cover just the situation now in hand, and to allow and in 
equity and justice to require that in fixing the value of 
this property for determining the ground rent in the 
future the appraisers should take into consideration the 
improvements and the cost thereof, and the rentals and 
the expenses of operation, and all other particulars, facts 
and information bearing upon the question of the actual 
value of the land between the lessor and the lessee under 
all the circumstances, including the burden of the change- 
able character of the rental from ten year period to ten 



31 

year period. The courts had held that in fixing values 
for estimating rentals under a re-appraisement lease the 
burden of the changeable character of the rental should 
be taken into consideration; and it is insisted that in 
writing this sixth paragraph that question was expressly 
intended to be covered. The sixth paragraph is wholly 
without meaning if the appraisers are simply to consider 
the land as though it were a clean lot filled smoothly to 
the street level and were under appraisement for the pur- 
pose for instance, of a sale to a stranger. What then 
would "the improvements" have to do with the value, or 
their "condition" or "value" or "cost," and what would 
"rentals" and "expenses" and "other particulars" 
have to do with the valuation made upon such a basis as 
that? Clearly the words are futile and useless if the ap- 
praisers are not at liberty to look at this property and 
say what is its fair value as between this lessor and this 
lessee under all the circumstances, including the burdens 
imder which the tenant labors as the holder of a lease 
which makes it impossible to borrow money ivhereivith to 
make modern improvements, or to know what is going to 
happen to the lessee in the future. The position in which 
the holders of these re-appriaisement leases now stand is 
known to all persons of experience in this city; around 
them great buildings are being erected extending deep 
into the ground and high into the air, their light is being 
cut otf from them, their old buildings are being impaired 
by the excavations of their neighbors, the competition in 
offices and other rentable space is constantly increasing, 
and they must stand still. The truth is that the burden 
of the re-appraisement situation, is, as between lessor 
and lessee, pre-eminently a fact ''bearing upon the ques- 
tion of the actual value of said land, ' ' and all reasonable 



32 

people are well aware of the fact, and no decision in 
the case of any lease which does not contain such a para- 
graph as this paragraph sixth, has any fair or proper 
application to the situation in hand. 

9. These premises 81.48 feet in width, east and west, 
are cut off from and never can be a part of State street 
frontage; to treat or consider them as capable of being 
made a part of a great department store or the like, 
fronting on State street, would be wholly unjustified and 
unfair. To all who have followed the decisions of the 
Supreme Court of Illinois, the last two or three years 
with respect to the right of the city or individuals to 
ignore the rights of the general public in streets and 
alleys, any proposition that these premises can ever be 
used in connection with a State street frontage, will 
seem futile. It might be admitted that every woman and 
female child in the northern half of Illinois will, if pos- 
sible, do all her trading on State street, and that at 
times she will go one block back in a great store, provided 
that she can enter on State street, and still any attempt 
to class this property in with property which can be used 
as a part of a State street frontage would result in the 
greatest hardship and injustice to the tenant ; and to ap- 
ply to this property the prices which have been placed 
on special pieces of property particularly needed to com- 
lete junction with State street property cannot fail to be 
disastrous and unjust. 

10. Also, it should not be forgotten that while this 
property is surrounded by alleys, the light to be had 
from them, when the neighborhood is built up with high 
buildings, as it almost certainly will be in the future, is 
not sufficient for a high building on the premises under 
consideration. If a modern ten or twelve story office 



33 

building were built upon the premises in question it 
would be necessary to devote a large amount of space 
within the building to the furnishing of light and ventila- 
tion. In other words, under the modern requirements 
for high buildings the lot is not well adapted for an office 
building; too much space within the lot lines would have 
to be surrendered to light and ventilation, and it cannot 
but be conceded that the best purpose to which the lot 
can be devoted is that of a building mainly devoted to 
theatre purposes, with offices in the front. The construc- 
tion of offices over the theatre have not proved successful 
even prior to the new ordinances of the City of Chicago, 
relating to the construction of theatres, and to construct 
a theatre now underneath offices is substantially impos- 
sible. On the other hand, a theatre to be successful at 
all must be very nearly the size of the present McVicker 
Theatre, but that leaves only a narrow space for offices 
in front; at the same time theatres are capable of pro- 
ducing only a certain rental. Neither management, skill 
or diligence will enable a theatre to pay more than a 
given amount of rent. The average paid for J&rst-class 
theaters throughout the country would tell the story of 
their rental capacity. With the exception of a very few 
houses which are devoted to continuous performances, 
theatres are used only in the evening, and for one or two 
matinees during the week, and are idle commonly during 
the vacation months of the summer, and it would be en- 
tirely impracticable and unfair to take as a measure 
against theatres generally the rental capacity of the one 
or two successful theatrical enterprises which furnish 
continuous performances. 

That the premises in question, owing to their size and 
location, are best employed when used for theatre pur- 



34 

poses, is, in a practical way, proven by what is now going 
on on the corresponding school property directly south 
of the premises in question, fronting on Monroe street, 
formerly known as the Chapin & Grore and Boomer prop- 
erties. These last mentioned premises, being in all 
respects the same size as the premises in question, were 
by Chapin & Gore and the Boomer estate, held under two 
long term school leases at an aggregate fixed annual rental 
of twenty-seven thousand dollars ($27,000). During the 
year last past these leases were acquired by the Lehman 
estate, and that estate is now engaged in erecting, upon 
said premises, a costly modern building, mainly devoted 
to theatre purposes with offices in front. It is submitted 
that an investigation of this new improvement will show 
that all the capital needed, is being used and that the 
greatest care and thought has been applied in the plans 
and construction. 

The theatre portion of said new building is 81 feet in 
width, and 130 feet in depth. The office portion in front 
is 81 feet by 62 feet, and is to be twenty stories in height. 
On the ground floor in front the east half is devoted to 
the theatre entrance alone, and there is a twenty foot 
store, and the balance of the front is devoted to the en- 
trance to the office building; that is to say, a 20 foot store 
is all that, under the present city ordinances and under 
modern plans and construction, could be saved out of the 
front upon the street level. 

Out of the space, 81x62 feet, given in this new building 
to office purposes, only 57x57 feet and 20x9 feet, can and 
will be saved on each floor for the use of tenants, the bal- 
ance has to be given up to elevators, pipes, shafts, etc. 

11. It is submitted that under all the circumstances 
there is no parcel of property with respect to which a 



35 

comparison can be made for the appraisement now in 
hand, so justly and so well, as the said premises on 
Monroe street now under improvement by the Lehman 
estate. The size of the premises is the same ; one fronts 
on Madison street and the other fronts on Monroe street; 
they are equally near State street; the light from the 
rear and the light from the alleys is just the same ; Madi- 
son street has street cars and Monroe street has not ; but 
the properties are in fact so nearly equal in their ap- 
proach to what is central in Chicago that the absence of 
street cars would appear to make no difference, while 
the speedy approach of Monroe street to being the very 
center of banking business in this great city, would cer- 
tainly make many investors prefer Monroe street to 
Madison street, if an investment were in question. But 
the size and location of both parcels of land make them, 
as above stated, both most suitable for the location of 
large theatres. 

The Lehmann estate having large means seeking in- 
vestment purchased the two school leases of the Monroe 
street property; as stated before, those school leases 
stand upon a fixed rental for a long period and the ag- 
gregate ground rental is twenty-seven thousand dollars 
($27,000) a year. For these leases the Lehmann estate 
paid the aggregate sum of one hundred and seventy-five 
thousand dollars ($175,000), or rather the Lehmann 
estate paid one hundred and fifty thousand dollars 
($150,000) and the future tenant of the theatre in ques- 
tion paid an additional twenty-five thousand dollars 
($25,000) which was demanded, so that the aggregate 
purchase price received by the vendors of the leases was 
$175,000. At four per cent. (4%) the going rate for 
money in Chicago for permanent investments, this 



36 

$175,000 is worth $7,000 a year. This, added to the 
$27,000 payable under the ground leases makes an ag- 
gregate of $34,000, which the Lehmann estate is paying 
for the permanent use of the Chapin & Gore and Boomer 
proiDerties. It must not be forgotten that their rental is 
fixed; there is no re-appraisement; there can be no in- 
crease in their burden save the taxes on the fee herein- 
after referred to. 

But the lessee of the property now under consideration 
for appraisement labors under the burden of constant re- 
appraisals. Judge Tuley, in his decision in the First Na- 
tional Bank case, found that the burden justly entitled 
the lessee to a deduction of ten per cent. (10%). As 
above set forth we insist that under paragraph sixth of 
the amendatory lease, we are in justice and equity en- 
titled to such a rebate, and if you deduct from $34,000, 
the rental which the Lehmann estate is paying for its 
above mentioned premises on a fixed basis, 1/10 or 
$3,400, you get as a result $30,600 as a rental for the 
premises under consideration, but upon the understand- 
ing however, common at the date of the Lehmann estate 
purchase, that there be no taxes on the fee. 

12. Within the last month the Supreme Court of Illi- 
nois has decided that the fee of the school lands may be 
taxed. This decision was made after the most full and 
able arguments, both printed and oral. Heretofore the 
school lessees have been assessed only upon the value of 
their leases and improvements, now they must pay upon 
the fee also, as their leases call for the payment by them 
of all taxes. Also they are by the revenue act subject to 
the payment of back taxes. 

It is well known that the six per cent, basis, for the 
school leases was established upon the theory of no taxa- 



37 

tion upon the fee, the going rate for long leases being five 
per cent, and it being assumed that the taxes to be 
escaped upon the fee would ordinarily equal one per 
cent. Now the whole theory has proved a fallacy. With 
respect to all of these matters and things the lessee is 
entitled in justice and equity to due consideration and 
to have the judgment of a full and valid board of ap- 
praisers, and not knowing when or how the board was 
appointed the undersigned reserves the right to object 
now and at all times to the appointment of the respec- 
tive members of the board of appraisers, their qualifica- 
tion and proceedings. 

The McVicker Theatre Company, 
dupee^ judah, willaed & wolf, 

Attorneys. 

STATEMENT OF BOAED OF EDUCATION IN RE- 
PLY TO McVICKER THEATRE CO. 

To the Honorable Board of Appraisers 
of School Fund Property, 

of the City of Chicago. 
Gentlemen : 

In the matter of the lease owned by the McVicker The- 
ater Company from the Board of Education of the City 
of Chicago of the property situated on the south side of 
Madison street, between State and Dearborn streets, sur- 
rounded on three sides by 15 foot alleys, described as 
Lots 9, 10 and 11 in Block 142 in School Section Addition 
to Chicago, having a frontage of 81.48 feet on Madison 
street, which is 75 feet wide, by a depth of 192 feet. 

The statement and argument of the lessee covering this 
piece of property is made by Messrs. Dupee, Judah, Wil- 



38 

lard and Wolf, and is comprised principally of state- 
ments showing tlie undesirability of the improvements 
located on the land and the use to which such improve- 
ments are put, the effect of Paragraph 6 in Supplemental 
Lease of June 15, 1888, an attempt to negative the bene- 
fit of the alleys surrounding the site, a comparison of this 
site with the Lehmann lease site, directly south thereof, 
and a plea in connection therewith for a rental of $30,- 
600.00 per anumn for the land, and finally, an allegation 
in reference to the payment of taxes under a late deci- 
sion of our Supreme Court. 

We must here again submit to your Honorable Body 
that this lessee, as is the case with each of the others, is 
attempting to have you consider the value of the lease- 
hold instead of that of the fee. We, on our part, must 
insist that your deliberations should be confined entirely 
to an ascertainment of the present value of the fee, ex- 
clusive of the improvements and leases, and we submit 
that it, in no way, concerns you what the character of 
the buildings situated upon this site is, or that the lease 
covering the premises is one with a re-valuation clause in 
it and not what is known as a straight 99 year term, and 
in this connection we wish it emphatically understood 
that we do not ask that Paragraph 6 of the supplemental 
lease be ignored, but neither do we wish it to be given a 
meaning other than it actually has or a force greater 
than it possibly can in reason be credited with. Para- 
graph 6 of the supplemental lease must be taken into 
consideration with each and every other clause of the 
supplemental and original leases and be considered for 
what it is worth. Clause 6 speaks for itself, and under it 
your Honorable Body is entitled to hear facts of any and 
all kinds which may be presented to you, but only for the 



39 

single purpose of aiding you in ascertaining the value of 
tlie fee of the land stripped of all liens, charges and 
clouds whatsoever, and we respectfully submit that the 
value of the improvements, the rent they produce and the 
purpose to which they are put can not, in any way, affect 
the value of the fee where, in the lease under which they 
exist, the rent for that fee is fixed and established by the 
very terms of the lease at a given sum, as in this case, to- 
T\it, 6% upon the value of the land. 

In the case of Springer v. Borden, reported in Vol. 210 
of the Illinois Reports, page 518, our Supreme Court has, 
in very plain language, shown the impossibility of facts 
limited to those mentioned in the language of Paragraph 
6 aforesaid throwing any light upon the value of the fee. 

Inasmuch as Paragraph 6 aforesaid is so persistently 
brought to your attention by the lessee, we wish to call 
your attention to that provision of the lease which estab- 
lishes the rent therefor at 6% per annum upon the cash 
value of the premises, without the improvements, and to 
suggest to your Honorable Body that, if the terms of the 
lease, as such, are to be considered in fixing the value of 
the fee to the land, then in any common sense estimate 
of that value it will become your duty to place a higher 
value upon said fee than you would be compelled to do 
were there no lease taken into consideration, and this, 
simply because the rental which must be paid for that 
fee for the long period of the unexpired term of this lease 
is 50% in excess of the present going rates for long term 
leases, and we ask that, if you do in any way take into 
consideration in establishing the value of this fee those 
terms of this lease which seem to you to in any way de- 
preciate the value of the fee, then you must also take 
into consideration this all-important term thereof which 



40 

warrants to the Board of Education an income on a 6% 
basis for the balance of the term on property which, if 
leased to-day for a like term, wonld have to be done at a 
4% rental according to the statements of the lessee itself 
which we are here answering. 

In this same connection, argument is made by the lessee 
that this fee is depreciated in value because of a late de- 
cision of our Supreme Court burdening it with the pay- 
ment of general taxes, and claiming that it was because 
of the presumption there was no such burden that the 6% 
rental was fixed upon in lieu of the then going 5% rental. 
This presumption is entirely in the minds of the lessee 
and has no real existence in fact, as is shown by the very 
terms of the lease itself, which provides as follows : 

' ' And the said party of the second part, for herself and 
her heirs, executors, administrators and assigns, further 
covenant and agree, to and with the said party of the 
first part, its successors and assigns, that during the con- 
tinuance of this lease she will pay all water rates and all 
taxes, duties and assessments, general and special, ordi- 
nary and extraordinary, of every nature and kind what- 
soever, which may be levied, imposed or assessed upon 
the premises herein demised, or upon any building, addi- 
tion or improvement, of any kind, which may hereafter, 
during the continuance of this lease, be erected, made or 
placed thereon, whether such taxes, duty, rate or assess- 
ment shall be for city, county, state or other purpose 
soever, and if the party of the second party, his executors, 
administrators or assigns, shall not, within thirty days 
after he shall receive notice from the party of the first 
part that the said premises have been advertised for sale 
for non-pa}Tnent of any tax, rate, duty or assessment, pay 
such tax, rate, duty or assessment, then, at the option of 



41 

the party of the first part, this lease shall be terminated, 
or the said party of the first part may, at its option, elect 
to pay such rate, tax, duty or assessment and to add the 
amount thereof to the amount of rent due or becoming 
due, and may collect the same, with interest thereon at the 
rate of 8% per annum, as so much additional rent of the 
said party of the second party, her heirs, executors, admin- 
istrators or assigns, either by suit at law or distress for 
rent, or in any other legal way." 

Certainly in no plainer language could the intent of the 
parties be shown that it was the purpose of each and all 
of the same to have the taxes, etc., paid by the lessee, in 
addition to the 6% fixed rental, but, as a matter of fact, 
up to the present time there has been no final determina- 
tion by our Supreme Court that this fee, or any other 
School Fund Property fee of like character, is liable for 
general taxes. The case spoken of by this lessee and by 
other lessees in their several statements is open and un- 
determined, a petition for re-hearing having been made 
in the Supreme Court, and that petition has, within the 
last few days, been granted. AVhat the decision of the 
Court will be on a further consideration of the facts and 
the law cannot be stated at this time. 

As affecting the value of the fee, the lessee argues that 
this site can never be used in conjunction with State 
Street frontage for one purpose and, therefore, cannot 
be of State Street frontage value. We are content to 
have the value fixed as of Madison Street frontage at this 
point, and deem that value to be readily ascertainable as 
such by taking into consideration sales and leases where 
values have been fixed on the land on Madison Street 
frontage and by the peculiar condition of this particular 
piece of property. This site is very favorably located. 



42 

hj reason of tlie 15 foot public alleys on three of its sides 
and the 75 foot wide street in front of it, thus always as- 
suring it light on each of its four sides and thereby en- 
abling the construction of a building covering its entire 
area, without the necessity of sacrificing any space for a 
court, and by reason of the fact of the permanent im- 
provements constructed to the west of it — the Tribune 
Building — having a large court which gives light to this 
site as well as to the entire Tribune Building, and by rea- 
son of the character of the construction of the new build- 
ing to the south of it on the Lehman-Boomer site, where 
the north 2/3 of that lot is left entirely open above the 
equivalent of a three story building, this site will enjoy, 
for the entire term of the present leasehold, much addi- 
tional light. The contention raised by the lessee that 
high buildings will destroy the value of the alleys above 
mentioned is hardly worthy of answer, because the same 
con,ditLons as to high buildings will be met in any site 
which could be selected within the loop district, and were 
it not surrounded by alleys, as in this case, there would 
have to be just so much additional ground space used for 
court and light purposes. This site, in so far as shape and 
surrounding light conditions are concerned, is probably 
the most valuable in the City, with the exceptions of the 
Rookery site, the Illinois Trust & Savings Bank site and 
the Chamber of Commerce site, and that it is possible to 
construct a building upon it, without sacrificing any room 
for court or light space, is demonstrated by the construc- 
tion of the National Life Building, at 159 La Salle Street, 
this City. That this site is more valuable than the Leh- 
mann-Boomer site on Monroe Street is readily ascertain- 
able when one remembers that Monroe Street is but 66 
feet in width, while Madison Street is 75 feet ; that Mon- 
roe Street has no street car line upon it, while Madison 



43 

Street has the West Side cable system loop ears passing 
over it, and that there is a regulation requiring cable 
trains to stop just before reaching State Street so as to 
make the Mc.Vicker Theatre site the same as a street 
crossing and causing thousands of persons to be dis- 
charged from the cars at this point, which materially 
adds to the value of the site. 

We desire shortly to call your attention to certain 
values of Madison Street frontage lately established by 
transactions on that street. 

On the corner of Wabash Avenue and Madison Street, 
Otto Young has taken a lease from the Catholic Bishop 
of Chicago on the basis of $86.80 a square foot. 

The Otises secured a lease on the South West corner 
of Madison and State Streets, size 48 by 80, on a basis 
of $169.00 a square foot, and the West 40 feet of the 
sale lot on a basis of $100.00 a square foot, making an 
average of $146.00 a square foot. The two pieces are 
now covered by a sixteen story building. In September, 
1904, the Otises sold a bond issue on that property on a 
showing that they earned interest on a land value of 
$30,110.00 a front foot, or $250.00 a square foot. 

In September, 1902, William A. Bond, John C. Fetzer 
and William D. Kerfoot appraised the City property 
across the street from the McVicker Theater site, leased 
to Mr. Netcher, at $84.00 a square foot, and this prop- 
erty was not an isolated piece like that here under pro- 
cess of appraisement. Mr. Netcher 's entire holding, from 
the alley to Madison Street and from State Street to 
Dearborn Street, averaged him in cost $105.60 per square 
foot. 

The Hartford Building, on the corner of Dearborn 



44 

and Madison Streets, is on a basis of $130'.00 a square 
foot. 

On December 24, 1904, Mills and Spofford leased to 
Alexander D. Hannah the Morrison Hotel corner for 
99 years, size 99i by 90 feet, for $50,000.00 a year ground 
rent, or on a value of $138.40 a square foot. 

On October 25, 1904, the University of Chicago leased 
the North West corner of Madison and La Salle Streets 
to the Illinois Life Insurance Company for 99 years, on 
a basis of $136.00 a square foot. 

By reason of all of the foregoing, we submit to your 
Honorable Body that the minimum value of the fee in the 
land at this date of the property here appraisable is 
$1,399,680.00, which is at a rate of $90.00 a square foot. 

We ask your Body to consider with this statement the 
Exhibits A, B, C, and D, heretofore furnished with the 
statement in the Crilly lease. Copies of said Exhibits 
are furnished the lessee's representatives with this state- 
ment. 

Respectfully submitted, 

BoAED OF Education, 
Of the City of Chicago, 

By James Mahee, and 
Angus Roy Shannon, 

Its Attorneys. 



45 



IN THE MATTER OF THE APPRAISEMENT OF 
THE McVICKER THEATRE PROPERTY. . 

Reply to the Aegument of Messes. Mahek and Shannon. 

To the Honorahe Board of Appraisers, 
Gentlemen : 

The attorneys for the School Board are correct in their 
suggestion that we urgently insist upon the recognition 
of the provisions of Paragraph Sixth of the Supple- 
mental Lease. And we urge that upon the position taken 
by the Board's attorneys the provisions of said Para- 
graph become wholly worthless to both parties to the 
contract. The landlord does not need them. Of what 
value is it to the landlord to know what are the expenses, 
for instance, of operating the present improvements, if 
the appraisers are to determine values without regard 
to the peculiar burdens under which the other party to 
this contract labors. 

We rely upon the rule that a contract is always to be 
construed, if practicable, so that all its parts shall have 
s.ome meaning and that no part is to be treated as hav- 
ing no reason whatever for existence, and upon the fur- 
ther rule that a lease is always most strongly construed 
against the lessor. 

''It is a familiar canon of construction that all 
grants, contracts, deeds, and leases of every descrip- 
tion shall be most strongly construed against the 
grantor, and if there be any doubt or uncertainty as 
to the meaning of any such grant, deed or lease, it 
shall be construed most strongly in favor of the 
grantee. Or if the contract may be given two con- 
structions, either of which is reasonable, the one 
most favorable to the grantee shall be adopted. 



46 

McCarty v. Howell, 24 111. 343; Massie v. Belford, 
68 111. 290; Nat 'I Bank v. Ins. Co., 93 U. S. 678." 

Schmol et al v. Fiddick, 34 111. App. 190. 

Counsel for the Board say : 

''Clause 6 speaks for itself and under it your 
Honorable Body is entitled to hear facts of any and 
all kinds, which may be presented to you but only 
for the single purpose of aiding you in ascertaining 
the value of the land stripped of all liens, clouds and 
charges whatsoever." 

But if you are not to consider the effect upon the 
tenant of the condition of the improvements and all other 
particulars including the burden of the constant reap- 
praisements, what possible good can it do for you to 
know what the improvements cost, or their condition, or 
the rentals, or the expenses. 

Surely none of these things have anything to do with 
the matter if you are to make your appraisement as if 
the land in question were a clean, unimproved parcel 
of real estate, unencumbered with this reappraisal lease 
and decadent buildings. 

And if any of these particulars are to be considered 
on behalf of one party to the contract, all ought to be 
taken into account on behalf of the other party when 
asking for that. 

In Springer v. Borden our Supreme Court was. dealing 
with a case where the parties had not agreed that the 
facts and particulars referred to in said Paragraph Sixth 
could be taken into account. Here we have the express 
agreement that it may be done. The Borden case has no 
application here. The Sixth Paragraph was inserted for 
the protection of the lessees as part of a compromise 



47 

settlement. There was no misunderstanding about it 
when the settlement was made. 

The lessee never claimed that the lease does not ex- 
pressly provide that the lessee shall pay all the taxes. 
But lessee states again the well known fact, not denied 
by the attorneys for the Board, that the six per cent, 
basis for the School leases was, adopted after discussion 
upon the theory and proposition that the School prop- 
erty would in fact never be taxed, and that, therefore, 
six per cent, was in reality equivalent to five per cent. 

Also, we wish to urge again that the property next 
south of the McVicker Theater now being improved by 
the Lehman Estate, and the prices and rentals paid 
therefor by said Estate, furnish the best and fairest basis 
for a comparison with the property under consideration. 

We submit that counsel for the Board have not suc- 
cessfully answered the comparison with the Lehman 
property set forth in number 11 of the first statement 
made by the lessee in this matter. 

With respect to the statement and argument of the 
attorneys for the Board, with regard to values, we beg 
leave to attach hereto the answer of Mr. B, A, Pessen- 
den, of this, city, a real estate dealer of experience, and 
ask that it be read and treated as a part of this state- 
ment. 

Respectfully, 

JUDAH^ WiLLAED & WoLF, 

Attorneys for The McVicker Theatre Company. 



48 



IN THE MATTER OF APPRAISEMENT OF THE 
McVICKER THEATRE PROPERTY. 

Answer by B. A. Fessenden to the Argument and State- 
ment WITH Respect to Values Made by the 
Attorneys foe the School Board. 

It is stated that this site in so far ''as shape and sur- 
rounding light conditions are concerned, is probably the 
mos.t valuable in the city." As this will be passed on by 
the men having great expert knowledge, it will not, per- 
haps, be necessary to refer to other sites; yet to give 
one example, the land on Washington street, north front, 
between the Chicago Opera House and the old Chamber 
of Commerce at the southeast corner of Exchange Place, 
90x181, with Washington street on the north. Exchange 
Place, 30 feet wide, on the west; Calhoun Place, 18 feet 
wide, on the south, and the large open area over the Chi- 
cago Opera House on the east, which has never been val- 
ued, even by the owners, at over $50.00 a square foot, is 
certainly better situated as to "shape and surrounding 
light conditions." 

To quote again, referring to the McVicker lot, ' ' that it 
is possible to construct a building upon it, without sacri- 
ficing any room for court or light space, is demonstrated 
by the construction of the National Life Building, at 159 
La Salle street, in this city." 

The lot under the National Life Building is at the 
southeast corner of La Salle street and Arcade court, 
88 feet wide on its west, or La Salle street front, and 
76 feet wide on its eas.t end. On the north it faces Arcade 
court, which has passage through from La Salle to Clark 
street, and is 32 feet wide. On the south, an alley open- 



49 

ing out of La Salle street, wliich for 46 feet east of that 
street is 9 feet wide, then 17 feet, then 21 feet and finally 
25 feet wide. The light court of the New York Life 
Building makes this opening still wider above the first 
story for part of the distance. If the 15-foot alleys about 
the McVicker lot could be widened to 32 feet on one side, 
and to from 17 to 25 feet on the other, the problem of 
using it for other purpos.es than a theater would be dif- 
ferent. There was an option out for the sale of the Na- 
tional Life lot, at $850,000, or $53.00 a square foot. It 
was sold to 0. D. Witherell at figures reported at from 
$850,000 to $1,100,000. 

To show that the McVicker lot is more valuable than 
its twin, the Lehmann lot, it is stated that Monroe street 
is 66 feet wide, and Madison street 75 feet. The addi- 
tional 9 feet of street width is an advantage, but it is 
safe to s.ay that only a small per cent, of the owners on 
Madison or Monroe streets know how many feet wide 
either street is, so it cannot make much difference in the 
values. 

As to the west side cable cars on the street, it is a 
question whether their passing the property makes up 
for their occupancy of the street, if Monroe street 66 feet 
wide without the car tracks, is not more valuable than 
Madison street 75 feet wide with them, so far as the 
tracks are concerned. 

Attention is called by the Board's attorneys' statement 
to certain values of Madison street frontage said to be 
established by transactions on that street. The property 
involved in each transaction quoted corners on another 
s.treet, and in each case that street is more important 
than Madison street, and the basis is 4%, and the pro- 







% 


of St. 






front to 


St.F'tage. ( 


each 


sq. ft. 


81.48 ft. 




.0052 


260' 


ft. 




.018 


168 


ft. 




.029 


143 


ft. 




.03 


1801 


ft. 




.02 


134" 


ft. 




.03 



50 

portion of street frontage to the area of each property 
is very mnch larger than that of the McVicker lot. 

We give below the street frontage and percentage of 
frontage to the square foot of each of the pieces quoted, 
as compared with the McVicker lot : 

Sq.Ft. 

The McVicker lot has 15,644 

Wabash, S. W. Madison has 14,400 
State, S. W. Madison has 5,760 
Dearborn, W. Madison has 4,650 
Clark, S. E. Madison, ground 

& hotel business, has 8,955 

La Salle, KW. Madison, has 4,293 

As to the Netcher property. This great piece, as it 
stands, has a special value because it has, a State street 
front, a Dearborn street front, as well as on Madison 
street, and an 18-foot alley on the fourth side, giving ac- 
cess and teaming facilities. The individual pieces had an 
additional value because they were to be absorbed into 
the whole. It is a question if a department store of the 
class which is to cover this lot will add to the value of 
Madison street. The people it brings there do not pay 
high prices for anything. Was not the valuation quoted 
made witli 20% added for long term lease? We have 
not quoted the valuations made on the McVicker property 
as we feel the present appraisers are capable of draw- 
ing their own conclusions. 

As to certain values on Madison street frontage, 
quoted, see notations as to ''Exhibit B." 

Signed B. A. Fessenden. 



51 



Eemaeks by B. a. Fessejstden as to Exhibit B to Argu- 
ment OF the. Attorneys for the Board. 

Sq. Ft. 
No. Value. 

1. The history of this transaction is that the 
Illinois Life Insurance Company made a 
trade for the Oriental Block, S. W. Cor. 
La Salle street and Calhoun j)lace, 18 feet 
wide, 76 feet on La Salle by 121 feet on 
Calhoun i^lace ; the South 26 feet being 81 
feet deep. The price was $450,000, or $ 57.00 
but a large percentage of the purchase 
price was in shape of outside property. 
The next, 49x:81 feet on La Salle street 
adjoining the 53-foot corner of Madison 
street was later leased by the same peo- 
ple for 99' years at 4% on $86.00 a 86.00 
sq. ft. They also acquired the long lease- 
hold of the 40x128 feet adjoining on Mad- 
ison street assuming a $10,000 mortgage, 
at a price quoted as nominal. It was sub- 
ject to a ground rent of $6,600 a year or 
4% on $32.00 a sq. ft., the next two pieces 32.00 
making 40x179 was then leased at 4% on 35.00 



The N. W. corners of La Salle street and 
Monroe, and of La Salle and Adams may 
be considered more valuable than the N. 
W. corner of La Salle and Madison 
streets. 



La Salle St., N. W. Cor. Madison, 179x161, 

52|x81 feet, quoted at 136.00 

La Salle St., N. W. Cor. Monroe St., 
190x734, Bryan Bros, to Byron L. Smith, 
6/9, 1904, $850,000, 60.86- 

For Northern Trust Company. 



I 



52 

Sq. Ft. 
No. Value. 

La Salle St., N. W. Cor. Adams. St., 128x75, 
Amalia Sclilosser et al. to Com Exehange 
Bank, 99 years, from Jan. 1, 1905, at 4% 
on $875,000, 78.00 



3. The history of this lease showed the rental 
was paid on too high a sq. ft. value. They 
have leased and made a part of this cor- 
ner the adjoining 45x100, 89 years, 10 
months from July 1, 1901, $12,000 a year, 
4% on ' 66.66 



Victor F. Lawson acquired the property 
adjoining this comer as follows :' 
#183 Madison, 30x80, brought $ 41.66| 

#125 5th Ave., 26^x80, brought 37.73 

#121 5th Ave., 25x80, brought 37.50 

#119 5th Ave., 25x80.95, brought 40.00 

Including the 99-year lease of #175-181 
Madison St., the whole corner, 29,221 Sq. 
Ft. is. at 32.00 



8. Part of large area with State St. frontage. 1 



12. The area around this corner 70x60' 

and adjoining on Randolph St. 40x90, 
being 60 feet on Randolph St., 

180 feet on East line, 

160 feet on Couch Place, 

110 feet on Dearborn St., 
was leased 99 years from May 1, 1892, at 27 . 00 



I 



16. Hard to have divided value of ground from 
value of building. Same purchasers ac- 
quired the building. 



17 & 18. Part of Boston Store site. 



53 

' Sq. Ft. 

No. Value. 

25. Paid for 24x90 adjoining on Clark St. 4% 70.00 
Paid for 24x90 adjoining above, 4% 58.49 

Monroe St., next on the east, 45x190, in- 
side is under 99-year lease at $9,600, to 
1909, 28.00 



42. 



43, 44, 47, 49, 50, 51, 52, 53, 54, 55 are on State 
St., many of them speculative or business 
leases without proper protection, or made 
with tenants who for special reasons will 
pay more than a lessee would on the open 
market. 



57. Paid too much. 



58. N. E. Wabash Ave. and Madison St., 
101x163 has just been leased for 99 years, 
April, 1905, 4%, 42.00 



59. History of Fort Dearborn leas.e proved 
values were too high. Last year leased 
30x90 adjoining on Clark St. to be made 
part of the corner at 69 . 16 

Cost 3 or 4 years before, when not con- 
sidered part of corner, 42.22 



Remaeks by B. a. F'essendei^ Concebning Exhibit ''C" 
TO Argument of ATTORisrEys foe School Board. 

Rentals of State street corner stores or of a forty-foot 
store just north of Adams street, or the saloon lease of 
a small Clark street corner are not much of a criterion 
of the value of the McVicker property. 



54 



Remaeks by B. a. Fessenden as to ''Exhibit D" to 
Aegument of Attoeneys foe School Boaed. 

In the purchase quoted, of School Properties,, the 
bonus are paid for various reasons. 

Business which could not be moved without loss was 
established at — 

#78-84 Madison street. 

:#: 151-153 Dearborn street. 

#150-152 State street. 

#149 Dearborn street was needed by the Tribune 
property, which it adjoined. 

#161 State street, 20x83 adjoined a corner only 26 
feet wide and gave the purchaser 46x83 feet at the N. E. 
corner of State and Monroe streets. 

#81-87 Madison street, part of the Boston Store site. 

#138-144 State street has rental established during 
life of lease until 1985, and a modern building can be 
financed with a speculative chance of profit. 

#71-73-75 Monroe street. Majestic Theatre and office 
building. The exact counterpart of the McVicker lot. 

The ground rent was fixed for the long lease at $27,000 
which, with the bonus, equaled a fixed rental of 34,000 
a year, or 4% on $54.33 a sq. ft. and the property could 
be improved to the best advantage. 



55 



JAMES K. SEBREE, AVA W. FAEWELL. 

Statement in Behalf of by Ashceaft & Ashcraft^ 

Attorneys. 

To the Appraisers of the Property Leased from the 
Board of Education of the City of Chicago: 

Gentlemen : 

We represent the leaseholds owned at the present by 
J. K. Sebree, on lots eighteen and nineteen, and the lease- 
hold owned by Mrs. Ava W. Farwell, on lots twenty and 
twenty-one, in block one hundred forty-two, School Sec- 
tion Addition to Chicago, and these properties, being the 
same size and very similarly situated, we concluded it 
would be economy of time to say what we desire regard- 
ing them together. They must be separately appraised. 

The Sebree property, lots 18 and 19, is held under an 
original lease of the School Board to Francis B. Pea- 
body of May 8, 1880, and a supplemental lease of June 
15, 1888. 

The Farwell lots are held under an original lease to 
Beverly R. Chambers of May 8, 1880, and the supple- 
mental lease of June 15, 1888. 

The terms of the leases are in the same form. 

Lots 18 and 19 have an aggregate frontage of 48 feet 
on Dearborn street by a depth of 120 feet to an alley in 
the rear, with a 15-foot alley on the south, and are im- 
proved by a five-story building, which, for many years, 
has been occupied as a res.taurant and hotel or rooming 
house. 

Mr. Peabody transferred his lease to Andrew Cum- 
mings on October 25, 1890, and Mr. Cumlnings occupied 



56 

the property, as we are informed, until the summer of 
1903, when he assigned his lease to John R. Thompson, 
who has continued to occupy the property and is still 
occupying it. He has, however, assigned his interest to 
J. K. Sebree under an arrangement hy which he holds 
possession for something like another year and pays 
ground rent, taxes and maintains repairs. 

We have not been able to obtain any information as to 
the earnings of the business in the property, and as it 
has not been sub-let, we believe no information we could 
obtain would be of value to you in ascertaining the value 
of the ground. 

The Farwell property, lots 20 and 21, since the last 
revaluation have had $28,867 expended upon it by way 
of betterments and repairs, and we think a statement can 
be made with reference to this property that might be of 
use to you in considering what value should be placed 
upon the property for the purpose of determining the 
rentals as provided and contemplated in the supplemen- 
tal lease. 

Making such statement, as statements of this, kind are 
ordinarily made, we should say that the annual disburse- 
ments would stand about as follows: 

Interest on investment in building $ 5,000.00 

Annual depreciation in building and im- 
provements 5,000.00 

Eent to School Board 11,220.00 

Taxes, about 900.00 

Average annual repairs, about 750.00 

Insurance on building and rentals, about. . 1,500.00 

$24,370.00 

The gros.s rental at the present time is $27,600 per an- 
num, showing a net profit on this basis of figuring of 
$3,230 per annum upon the lease. 



57 



Aegument. 

It is a matter of history, known to all of us, that there 
has been a great amount of difficulty and no small 
amount of hardship resulting from the school leases in 
Chicago. When these leases were made the prevailing 
net rentals in Chicago were based on about 5% of the 
land value, and, as. it was supposed no general taxes 
would be imposed upon the ground, it was deemed equita- 
ble to fix the rentals on a basis of 6%. At that time the 
rates of interest were high. 

At this time the prevailing rate of interest on large 
sums is 4%, or a shade under that sum, while ground 
leases for long terms are made on a basis of from 2.65 to 
4%, and most of them on a 3|% basis. Many 'of them, 
however, as low as 3%. Government bonds drawing 2% 
interest are at a premium. 

As early as 1888, the change in the rate of interest 
and the change in the basis of rental values had become 
so reduced the School Board found itself, as well as its 
tenants, involved in litigation. There were many suits 
for injunction, for possession, etc., resulting in the sup- 
plemental lease of June 15, 1888. 

In this lease was inserted the sixth clause, which au- 
thorizes the appraisers to take into consideration the im- 
provements on the land, the character, condition, value, 
cost, rental, expenses and other particulars, and any 
other facts or information bearing upon the question of 
the value of the land. It was supposed this clause of 
the lease meant something, and for that reason the ap- 
praisers were authorized to take into consideration the 
condition of the improvements and income of the prop- 
erty. Conditions changed. 



58 

The Supreme Court has lately rendered a decision 
holding those leased school properties are taxable. This 
not only greatly deteriorates the value, but you can see 
it at once wipes out all the profit if enforced. 

In both the cas.es under consideration in this argument 
it is apparent that within ten years the buildings now 
upon the property will have "become entirely useless, and 
a burden instead of an investment, and while we, in the 
above statement, have estimated an annual depreciation 
of 5%, in fact the depreciation during the next ten years 
will be the full present value of the improvements. 

It may be said the property should have better im- 
provements upon them. When the present improvements 
were made they were considered fine and up to date. We 
doubt if there is. a building in the business center of the 
city erected twenty years ago which is not an encum- 
brance rather than a benefit to the ground upon which 
it stands. Many of them are worse than that. 

It might be said that the ground should be improved 
with modern buildings of steel construction and that they 
will last forever. This would be a bold and reckless 
assertion. Wlien the old First National Bank Building 
was erected, you will recall, the directors were criticised 
for their extravagance. Before the destruction of the 
building, not much exceeding twenty years, it was an an- 
nual loss, with the result that it was an encumbrance 
upon the property, and the terms of the lease resulted in 
litigation between the bank and the School Board. 

It is a matter of common knowledge that no person 
can be induced to erect a modern structure upon a lease 
subject to revaluation every ten years. No considerable 
money could be borrowed to us.e in the erection of a build- 
ing upon such a leasehold. 



59 



What Valuation Should Be Placed Upon the 
Peoperty ? 

It is possible property has appreciated in value since 
the last appraisement, but this is more than wiped out 
by the general taxes to be imposed upon the property 
under the decision of the Supreme Court. There will be 
before you, presented by other parties, many estimates 
based upon leases and sales. Almost every one of them, 
exceeding the valuation now placed upon this property, 
has some explanation. In one case, the owner of the 
ground is said to have contributed a large sum of money 
toward the construction of the building. Others are cor- 
ners, or more favorably situated. 

These two separate properties are distinct with a 15- 
foot public alley between them and neither of them large 
enough to carry a large modem tall building. The pres- 
ent valuation is, approximately, $190,000, or about $4,000 
per front foot and about $33 per square foot. 

The properties referred to, mos.t like it as to situation, 
is probably the McVicker property on Madison street 
and the Chapin & Gore property on Monroe. These 
properties ought not to be compared with either the 
Tribune corner or the First National Bank corner. Those 
properties are both corner properties and are large and 
capable of maintaining large modern structures. 

The Chapin & Gore property, with the adjoining prop- 
erty on MonrOe street, the School Board were pleased to 
rent for a long term of years without revaluation some 
three years ago for an annual rental of $27,000. This is 
a property 81 feet on Monroe street with a depth of 192 
feet, and the lease was made, we are informed, after care- 
ful investigation and inquiry by the School Board, and 



60 

if taken upon a 6% basis would be upon a valuation of 
$450,000, or sometbing over $5,000 a foot with a depth of 
192 feet, and an alley all around it, except on the Monroe 
street front, and this it must be remenibered is upon a 
long time lease without revaluation ; and while it may be 
true the gentlemen composing this Board of Appraisers 
may have the right to disregard the evident purpose and 
understanding of section six of the supplemental lease, 
we submit it should not do so, and should remember and 
consider that where property is purchased in fee, a large 
element of the estimated value is an element of specula- 
tion upon future advances, and the consideration of the 
fact tnat, no matter what transpires, the owner may al- 
ways have the advantage of possession and control, which 
elements largely enter into a 99-year lease without reval- 
uation. 

Money may be borrowed upon such a leasehold as the 
fixed charges, are determinable. Improvements reason- 
ably suited to the property may be erected, but not so 
with a leas.e with a ten year revaluation clause. And in 
this connection it may be proper to suggest that these 
property owners, recognizing the hardship of the situa- 
tion, the change of conditions, change of rates, the dif- 
ferences in cost of construction, and other elements, have 
sought to negotiate from the School Board long term 
leases without revaluation. 

The School Board leas.ed the 40 feet immediately ad- 
joining the Farwell property on the south- to Caroline F. 
Wilson at an annual rental of $7,980 to May this year 
and $8,379 thereafter. At a 6% basis this would be upon 
a basis of a valuation of less than $140,000, or about 
$3,500 per front foot, and less than $30 per square foot. 
While the long time lease on the Chapin & Gore prop- 



61 

erty on Monroe is on a basis of about $35 per square 
foot. 

All the facts considered, we submit that no valuation 
should be placed on this property that will materially in- 
crease the rental. 

Respectfully submitted, 

AvA W. Farwell, 
J. K. Sebeee, 

ASHCEAFT & ASHCRAFT, 

Attys. 

E. M. ASHCEAFT, 

Of Counsel. _ 

REPLY OF BOARD OF EDUCATION 

To Statement in Behalf of James K. Sebeee and 
Mes. Ava W. Faewell. 

To the Honorable Board of Appraisers 
of School Fund Property 
of the City of Chicago: 

Gentlemen : — 

In the matter of the lease now owned by J. K. Sebree 
from the Board of Education of the City of Chicago of 
the property situated on the east side of Dearborn street 
abutting, on the north, the east and west alley running 
east from Dearborn street, betwen Madison and Monroe 
streets, in said city, described as lots 18 and 19 in block 
142 in School Section Addition to Chicago, having a 
frontage of 48 feet on Dearborn street by a depth of 
120 feet to a 15 foot alley in the rear, the alley abutting 
on the south being 15 feet in width. And the matter of 
the lease now owned by Mrs. Ava W. Farwell from the 



62 

Board of Education of the City of Chicago of the prop- 
erty situated on the east side of Dearborn street and 
abutting, on the south, the 15 foot alley running east 
from said Dearborn street, between Madison and Monroe 
streets, in said city, described as lots 20 and 21 in block 
142 in School Section Addition to Chicago, having a 
frontage of 48 feet on Dearborn street by a depth of 1 20 
feet to a 15 foot alley abutting said lots in the rear, the 
said alley abutting said lots on the north being 15 feet 
in width. 

Mr. Sebree and Mrs, Farwell are represented by 
Messrs. Ashcraft & Ashcraft, who present the statements 
as to both leases under one cover. Because of this fact, 
the statement of the Board of Education as to both of 
the foregoing leases is placed under one cover. Your 
Honorable Body should not, however, make the appraisal 
as to tliese two leases as one unit, but you should neces- 
sarily, under the terms of said leases, appraise each sep- 
arately. 

The argument is made by the lessees' representatives, 
that neither of their leaseholds is lara'e enough for a 
modern building, and that the present value of $33.00 
a square foot at the 6% rate, which, at the going 4% 
rate, amounts to $49.50 per square foot value, is high 
enough. This claim is the same as that made by Mr. 
Crilly, and it is here contended, as it was by him, that 
the property involved should not be compared, in any 
way, with the Tribune Building or the First National 
Bank Building corners. That contention has been an- 
swered to you prior to this time, and we will not enter 
into it now, believing that the knowledge of the ap- 
praisers of existing conditions is sufficient to refute the 
claim that the value of the property is materially differ- 
ent from that of like property within the same city block. 



63 

In tlie statement furnished on behalf of the lessees, 
it is shown that there has been a charge made of 5% 
depreciation on the building per year. In another part 
of the statement it is shown that this building has been 
erected for 25 years. Hence they have already credited 
themselves with 125% depreciation thereon, or 25% 
more than the total value of the improvements. They 
admit that the appraisers have the right to disregard 
Clause 6 of the supplemental lease. On page 5, they ad- 
mit that the land has appreciated in value since the last 
appraisement. It is the opinion of the Board of Edu- 
cation, that the present cash market value of this land, 
with the side light and the rear light, at a minimum is 
$80.00 a square foot, or a total value for each leasehold 
of $460,800.00. 

The present rental on the ground is $11,400.00 a year. 

That the value on which such rental is based is too low 

is shown by the acts of the tenants themselves, to which 

no reference is made by the lessees' representatives in 

their statement. These acts are as follows : 

First: Andrew Cummings, who held a lease 
on the 1895 Valuation, sold his lease- 
hold in September, 1903, to John R. 
Thompson for $ 75,000.00 

Second: John R. Thompson later sold said 

lease to J. K. Sebree for $120,000.00 

The lessees claim that under the 6% basis the present 
square foot value of the land is $33.00 which, if fig- 
ured on the going 4% basis, would make a value per 
square foot of $49.50, but this value totally ignores the 
bonuses paid, and by the very act of the parties them- 
selves it is shown that in their opinion, at the time they 
purchased the said leases, the land had enhanced in value 
so as to permit them to take the same with the exception 



64 

of making a reasonable profit thereon under a computa- 
tion which fixed an additional square foot value of $20.86 
or a total of $70.36 per square foot. We figure the said 
additional $20.86 square foot valuation upon what Mr. 
Sebree paid for the lease in the open market, being 
$120,000.00 for 5760' square feet. 

The Sebree and Farwell properties are both used for 
hotel purposes, and that $80.00 is a very moderate value 
for such purposes is. shown by the Alexander D. Hannah 
lease of the property at the corner of Madison and Clark 
Streets, devoted to the same use, which was made in 1904 
on a basis of $138.40 a square foot. 

The claim that neither of these two parcels of land, 
each 48x120 feet with alleys on two sides thereof, is large 
enough to be used for the construction of a modern build- 
ing is refuted by existing conditions in nearly every block 
within the loop district of this city. 

Examples of square feet values for down town prop- 
erty, where the sites are similar to this in question or 
throw direct light on its proper value, are found in the 
Fisher Building, at the Northeast corner of Dearborn 
and Van Buren Sts. where in May, 1904, Mr. Fisher s.old 
bonds to the extent of $800,000.00 covering the building 
and ground to the 1st Natl. Bank on a showing that that 
ground paid on a $100,000 and upward value per square 
foot. 

The Monadnock Block, Mr. Aldis says, paid on a 
$140.00 value per square foot. 

The Bedford, on the Southeast corner of Adams and 
Dearborn Sts., which is not as large as either of these 
properties, pays on a value of $100.00 and upwards per 
square foot. 



65 

The Little Hartford, 50x90, on tlie Southwest comer 
of Dearborn and Madison, pays on a valuation of $130.00 
per square foot. 

Mr. Netcher paid the Manierres on May 30', 1903, 
$110.00 a square foot for 63x80 feet on the Northeast 
comer of Dearborn and Madison Streets, which is a 
smaller area than either of the properties in question. 
On the same day he also paid Henning and Speed, for 
the adjacent inside piece, 76x80 feet, with no alley on the 
side and no alley in the rear, $80 a square foot. 

The above illustrations ought certainly be sufficient to 
demonstrate the fairness and conservativeness of the 
$80.00 per square foot value asked by the Board of Edu- 
ration on each of the properties here sought to be ap- 
praised. 

In this statement your attention is again called to Ex- 
hibits. A, B, C and D now before you, which were fur- 
nished ""with the Board's statement in the matter of the 
Crilly Lease. We request that in considering this state- 
ment and the value of the Sebree and Farwell sites, you 
take cognizance of said Exhibits, copies of which are fur- 
nished to Mr. Sebree and Mrs. Farwell by their repre- 
sentatives, Messrs. Ashcraft & Ashcraft, as a part of the 
Board's statement in reference to the sites here con- 
cerned. 

Eespectfully submitted on behalf of the Board of Edu- 
cation. 

Board of Education of the 

City of Chicago, 

By James Maher and 
Angus Roy Shannon, 

Its Attorneys. 



66 



DANIEL F. CEILLY. 

Statement in Behalf of by Cassoday & Butler and Oli- 
ver D. Crilly, Attorneys. 

To the Honorable Board of Appraisers of 

School Property of the City of Chicago: 

GrENTLEMEN : 

Daniel F. Crilly leases from the Board of Education 
of the City of Chicago the property at the northeast cor- 
ner of Dearborn and Monroe streets described as the 
south eight (8) feet of lot 23 and all of lots 24, 25, 26 
and 27, in block 142, in School Section Addition to Chi- 
cago, having a frontage of 120 feet on Monroe street and 
104 feet on Dearborn street. The lease expires May 8, 
1985, and subjects the property to revaluation every ten 
years. 

In submitting this written statement or argument for 
your information, as the lease provides may be done, we 
beg first to state that though the lessee was given no 
voice in the matter of selecting even a single member of 
this body, a privilege which would not be denied him in 
a lease drawn in full fairness to both parties to it, he, 
nevertheless, from his acquaintance, personally and by 
reputation, with the gentlemen who have been appointed 
as appraisers, comes before you with a feeling of confi- 
dence that your conclusions will be fair to all parties con- 
cerned. It has always been difficult, and sometimes im- 
possible, for the lessees of school property to negotiate 
or treat in any way with their lessor. This state of af- 
fairs is due largely, if not solely, to the inequitable pro- 
visions contained in these leases, which are extremely 
harsh upon the lessees and correspondingly favorable to 



67^ 

the Board of Education. Against the extreme severity 
of some of these provisions the lessees of school prop- 
etry have for the past thirty years been engaged in a 
constant struggle with the school board, and that strug- 
gle has been carried on most largely in the courts, to 
which fact the records of the courts of this county and 
state give abundant testimony. The lessees have been 
bitterly attacked without warrant to such an extent that 
in a measure public sentiment is more or less crystal- 
lized against them. It is only fair to say that the loudest 
mouthings have come from the most irresponsible peo- 
ple. 

Mr. Crilly's contract of lease is evidenced by two writ- 
ten documents. The original lease bears date the 8th 
day of May, 1880. A contract bearing date June 15, 
1888, amends the original lease in several particulars. 

By the terms of the original lease it is provided : 

' ' Said Board of Education of the City of Chicago shall 
appoint three discreet male residents of the City of Chi- 
cago who are freeholders and who are not interested as 
lessees or mortgagees of school property in said city, 
to determine, under oath first duly taken, the true cash 
value of the said premises above demised at the time of 
such appraisal, not taking into consideration the im- 
provements thereon. * * * And upon such valuation 
so determined and found as aforesaid of the premises 
described in this lease shall be calculated six per cent, 
thereof, the product of which or the said percentage 
upon the valuation aforesaid shall be the yearly rent 
reserved upon the above described premises for the term 
of five years, commencing on the 8th day of May, 1885, 
and ending on the 8th day of May, 1890. 



68 

And for each term of five years thereafter until the 
determination of this lease like appointments of apprais- 
ers shall be made by the said Board of Education and 
like valuations and assessments made by such apprais- 
ers", etc. 

The contract amendatory of the original lease, which 
we shall hereinafter call the "amendment," provides 
among other things : — 

"That in lieu of the method of appointing appraisers 
for the purpose of ascertaining, determining and fixing 
the amount of rent to be paid for said demised land, as 
provided in and by the terms of said lease, and this sup- 
plement thereto, appraisers shall be appointed as fol- 
lows: 

The Board of Education of the City of Chicago, any 
Judge holding the Circuit Court of the United States in 
and for the Northern District of Illinois for the time 
being, and the Judge of the Probate Court of Cook 
County, Illinois, or the successors of said court having 
probate jurisdiction, for the time being, shall each ap- 
point one discreet male resident of the City of Chicago, 
not interested as lessee or mortgagee of school property 
in said city, to determine, under oath first duly taken, 
the true cash value of said demised land at the time of 
such appraisal, exclusive of the improvements thereon." 

The "amendment" further provides: — 

"It is hereby declared by the parties hereto, that it 
is not the purpose of this instrument that the persons 
appointed as appraisers hereunder, or either of them, 
shall be the representatives of either of the parties here- 
to." 

It is not apparent at the present time that the above 



69 

provisions quoted from the ''amendment" concede any- 
thing to the lessee which a contract drawn in fairness to 
both parties would not have given to him in the first in- 
stance. Yet it was only after numerous protests and liti- 
gation instituted by both parties to the contract that 
these eminently fair provisions of the "amendment" 
were accepted by the school board. It would seem even 
now that the lessee, who is as much interested as the les- 
sor in the results of this appraisal, should be entitled to 
the same rights as those enjoyed by the lessor in the se- 
lection of appraisers. The esteem in which the members 
of the present board are held does not justify the one- 
sided provisions made for their selection. 

Elements of Value Appeaisees May Consider. 

The "amendment" provides: — 

^' Sixth. That, notwithstanding anything in said lease 
contained, the appraisers shall be at liberty in forming 
their judgment of the value of the land, without includ- 
ing the value of the improvements thereon, to take into 
consideration, if and so far as they deem it pertinent to 
do so, the improvements on such land, and the character, 
condition, value, cost, rental, expenses and other particu- 
lars thereof, and any other facts or information, from 
whatever source, bearing upon the question of the actual 
value of said land ; and it shall be the duty of the lessee 
to furnish the appraisers promptly, on request, a state- 
ment showing the rental receipts and disbursements on 
account of said improvements for five years, as near as 
may be, next preceding the time of the appraisement." 

It is for the purpose of assisting you in forming your 
judgment of the value of the land that we lay before you 



70 

the following facts, as the above paragraph from the 
''amendment" provides may be done. 

The Cash Value of this Peoperty if Leased for 99 
Yeaes without Eevaluation Would Unquestionably 
be Geeater than it is at the Peesent Time with the 
Existing Lease Outstanding against it. 

In other words, the Board of Education could reason- 
ably expect to receive and the lessee to pay a higher 
rental if the revaluation clause were eliminated from this 
lease. 

The lease provides that you should determine the true 
cash value of the said premises above described at the 
time of appraisal. Because we believe this honorable 
board will be glad to have the benefit of the knowledge 
and experience of that venerable and eminent jurist, we 
take the liberty of quoting somewhat at length from the 
opinion of Judge Tuley rendered in a proceeding in 
equity between the National Safe Deposit Co. and the 
Board of Education of the City of Chicago, which is only 
one of the numerous legal proceedings that have arisen 
on account of the inequitable provisions of school leases 
of the same class as Mr. Crilly's. The provisions cited 
by Judge Tuley from the lease before him for considera- 
tion are identical with the provisions contained in Mr. 
Crilly's lease. 

Judge Tuley says : 

''In my opinion the clause of the supplemental lease 
in question [same as Clause Sixth above quoted from 
Mr. Crilly's lease] adds nothing to and takes 
nothing from the duties of the appraisers as 
fixed in the original lease, and if such matters should be 



71 

considered by the appraisers or by the court they can- 
not be made controlling facts in fixing the true cash value 
of the land as required by the lease. * * * 

''What is cash or market value and the method of as- 
certaining it is best stated in Lewis on Eminent Do- 
main, Sec. 478: 

'' 'The market value of property is the price which it 
would bring when it was offered for sale by one who 
desires, but is not obliged, to sell it and is bought by 
one who is under no necessity of buying it. In estimat- 
ing its value all of the capabilities of the property and 
all uses to which it may be applied, or for which it is 
adapted, are to be considered, and not merely the condi- 
tion it is in at the time and the use to which it is then 
applied by the owner. It is not a question of the value 
of the property to the oivner. All facts as to the condi- 
tion of the property and its surroundings and capabili- 
ties may be shown and considered in estimating its 
value.' " 

"What should the court, in attempting to do what the 
appraisers should have done, consider in determining 
the true cash value of the land? The answer is, that the 
court must determine what this land, if offered for sale 
in the market, would bring on a fair negotiation between 
parties not obliged to treat. 

"The first thing one desiring to -purchase, but not 
obliged to do so, would do would be to view the property. 
He would see a building on it; his first question would 
be who owns this building? The answer would be the 
National Safe Deposit Company under a lease from the 
Board of Education of the City of Chicago, ending on 
July 1, 1931, the unexpired term being thirty-three years. 



72 

He would then say to himself, I am dealing with the City 
of Chicago, I must examine into the title and power of 
the city as to this land, and of the right of the Board 
of Education to lease it, and also as to the terms of the 
lease. 

* ' Upon examination he would find the title in the city 
in trust for schools and that no sale of the land could 
'be made except by the City Council upon the written 
request of the Board of Education.' (Chapter 122, Rev. 
Stat. Sec. 82). And that the Board of Education was in- 
vested with 'power to lease school property.' (Same 

Sec.) . ; ; 

"Assuming he should find the lease to be a valid lease, 
his first inquiry would be what rental could be expected 
from the ground lease, what is the security therefor, and 
what are the terms and conditions of the lease*? From 
an examination of the original lease he would find that 
the rental was to be fixed for every period of five years 
(under the supplemental agreement, ten years) at six 
per cent, of the cash value of the land, irrespective of im- 
provements, such valuation to be determined by ap- 
praisers to be appointed by the lessor, and that a lien 
was given for rent upon all buildings and improvements 
that might at any time be erected upon the land. He 
would also find that if he bought the land and desired to 
lease the same to any other party than the lessee or its 
assigns, at the expiration of the present lease, 1931, or 
any renewal thereof, he could not do so if the present 
lessee (or its assigns) should be willing to accept and 
take a renewal of the present lease on the same terms 
and conditions, and if such lessee (or assigns) was not 
ready to accept and take such renewal lease, then he 
could only lease to such other party on the condition that 



73 

such pther party would take and pay for all improve- 
ments at a valuation to be determined by the appraisers 
appointed as in the lease provided. He would also find 
the provision last cited would be void if the City of Chi- 
cago should elect to sell the premises, and a peculiar 
provision, that if the City of Chicago should elect to 
sell upon the request of the Board of Education (the 
only condition upon which it could sell) the lessee had a 
right to purchase at a value to be fixed by appraisal, 
'a. reasonable credit being given for a portion of the 
purchase money,' but if lessee failed or neglected to 
purchase the same at the appraisal within ninety days 
after the appraisal was made, then the lessee should for- 
feit all improvements on the land. 

"He would also be advised that this provision, if valid, 
would be held to be an implied covenant that the Board 
of Education would not request the city to sell this land 
prior to 1931, and that it would then request a sale by 
the city to the lessee at a valuation to be fixed by ap- 
praisal as provided in the lease. 

''If the construction of the charter provision of the 
city that 'no sale (of school land) shall be made except 
by the City Council upon the written request of the 
Board of Education, ' is that the Board of Education can 
so bind itself and the city as it is attempted to bind them 
in the said proviso cited, there could be no sale to any 
other than the lessee prior to 1931, except such lessee 
would consent to waive the above cited provision in his 
favor. 

"If, however, the true construction of the charter pro- 
visions as to the power of the city and the Board of 
Education is, that the Board of Education had no power 
to so bind itself, or to so bind the city, and that the pro- 



74 

vision as to the right of the lessee to purchase the land 
at a valuation as of 1931, is wholly void, and that the 
City Council cannot be controlled by the Board of Edu- 
cation, either as to the purchaser or the price to be paid 
or terms of payment, the question would then arise 
whether or not there is a right to a continuous renewal 
from time to time on the same terms and conditions as 
in the present lease. 

"It will also be seen that the lease imposes a penalty 
of twenty-five per cent, additional rent for non-payment 
of any installment and gives power to forfeit for non- 
payment of such installments and the twenty-five per 
cent, additional, and also that it gives power to sell the 
lease and improvements at public auction if any install- 
ments of rent and the penalty therefor, shall remain due 
and unpaid for thirty days. These provisions are re- 
ferred to as showing the complicated and difficult ques- 
tions that may arise under this lease and it is not neces- 
sary for the court to express any opinion thereon. 

"It must be admitted that several of the recited pro- 
visions are harsh and oppressive on the tenant, and 
give extraordinary rights to the landlord, and tend to, 
and are certain to, produce complications and litigations 
as to the rights of the parties. 

"The lease illustrates in my opinion the truth that in 
seeking to have the tenant entirely within his power, 
and at his mercy, the landlord sometimes overreaches 
himself, and that harsh provisions tending to induce 
litigation are of more injury than benefit to the lessor, 
and that a lease like the present, by reason of the un- 
certainties as to the rights of lessor and lessee, and the 
complications and litigations that will probably arise 



75 

between the parties, is an incumbrance upon the fee, and 
does aiTect the true cash value of the land. 

''It is in evidence that leases containing provisions 
for appraisement to fix the rental in short periods by a 
valuation to be made of the land, are of much less value 
to both the lessee and the landlord than what is called a 
straight lease for a definite period, with a fixed rental 
therein named. 

"It is also in evidence that on a lease like the pres- 
ent, which permits an assignment at pleasure of the 
lessee whereby the lessee assigning escapes further lia- 
bility for the rent, the improvements placed upon the 
premises are looked upon as practically the only security 
for the payment of the rent, and are a security only to 
the extent of their value, which steadily depreciates by 
lapse of time. 

''If the buildings are such as will not pay a fair in- 
come to the lessee upon their cost, and the character 
of the building is not such as to justify the same being 
torn down, and better rent paying buildings erected, 
because of the shortness of the unexpired term, it is 
clear that these facts would be taken into consideration 
by any intending purchaser, and would affect the amount 
he would offer for the land. 

"It is impossible to resist the conclusion that if this 
land, the title of which is in the city, in trust for schools, 
with power to sell only upon the written request of the 
Board of Education, upon which board only is conferred 
the power to lease, should be offered for sale in the pub- 
lic market, this lease being upon the property, its terms 
and provisions would be a considerable factor in the 
mind of any purchaser in determining what he would 



76 

pay for the land, and in determining the amount of 
money for which the land could be sold in the market. 

''The question under the authorities is the true cash 
or market value of this identical land, and not what 
other land in the same neighborhood and similarly sit- 
uated could be sold for, although the question as to the 
selling value of such other land could be resorted to by 
the appraisers in making up their verdict as to the true 
cash value of this land. 

' ' The evidence shows that this land would bring more 
in the market if there was no lease upon it, than it would 
with the present lease upon it. This land beyond any 
doubt would sell for more with an ordinary lease for 
thirty-three years upon it at a rental of six per cent, 
upon the valuation to be made at fixed periods, than it 
would sell for if the tenant was required to pay only 
two per cent, upon such valuation. 

''While the evidence discloses that this lease is in 
the nature of an encumbrance upon the land and depre- 
ciates its value, it is difficult to arrive at the extent of 
such depreciation. The market value of any land cen- 
trally located as this is, is no fixed quantity. It is safe to 
say that real estate experts differ at least twenty per 
cent, in their estimates of value of such property. 

"I am of the opinion that the true cash value of this 
land (irrespective of improvements thereon, if it was 
not leased, would be $912,000 and that the true cash 
value of this land, considering that the lease in ques- 
tion for thirty-three years upon the land, is (irrespective 
of the value of the improvements) the sum of $820,800. 

"The rental will be fixed at six per cent, upon that 
amount, to wit, $49,248 per annum, to which it is to be 



77 

added tlie six per cent, upon the $15,000 specified in the 
lease, making the total rent the sum of $50,148 per an- 
num. 

''Let a decree be prepared in accordance with the views 
expressed." 

The Board of Education was evidently satisfied that 
Judge T'uley's opinion would be sustained by the Ap- 
pellate and the Supreme Courts of this state, for the 
litigation terminated with the entering of a decree by 
the trial court in accordance with the views expressed 
in the above opinion. 

Under paragraph Sixth of the ' ' amendment ' ' set forth 
on page 4 above, we suggest as proper for your consid- 
eration, insofar as you may deem them pertinent, the 
following factors and elements of value. 

Effect of Pkesent Lease on the .Value of this Prop- 

EETY. 

1. It would be by all means desirable from the view- 
point of both parties to this lease to first of all have 
its revaluation clause eliminated, and a fixed annual 
rental for the balance of the term agreed upon. Mr. 
Crilly does not endeavor to conceal his anxiety to have 
this brought about. It is not necessary to offer argu- 
ment to substantiate the well-known fact that no lessee 
of property inside the loop subject to revaluation every 
ten years would improve it with a modern building. 
Without the elimination of the revaluation clause from the 
leases of the Tribune Company, the National Safe Deposit 
Company, Mrs. Augusta Lehman and Mr. Otis, the mag- 
nificent new buildings belonging to these school tenants, 
already reared and in course of construction, would have 



78 

been impossible. The school board would undoubtedly 
be glad to have Mr. Crilly's present building replaced 
with one up to date in every particular, not only for the 
sake of the improvement and the benefit it would be to 
the city, the beauty it would add to the street, the in- 
creased value it would give to the property under and in 
the neighborhood of it, and the consequent increase in 
taxes, about one-third of which goes to the school board, 
but also because such a building would be certain to pro- 
duce a larger income for the school board, directly and 
indirectly, and because it would be a very much better 
security for the performance by Mr. Crilly of his part 
of the contract. However, under the lease as it now 
stands such an improvement is out of the question, 
though greatly desired by both parties. In determining 
the value of this property, this limitation, which is "a 
condition and not a theory," must constantly be borne 
in mind. 

2. The contract is made uncertain by numerous of 
its provisions, thereby impairing its value to both par- 
ties. 

It is uncertain in its revaluation clause, by the terms 
of which the lessee knows only that he is at the pres- 
ent time paying a large annual rental, being an increase 
of 116 per cent, over the rental paid by him under the 
last previous revaluation, and that he is obligated to 
continue to pay an unknown but certainly a large annual 
rental during all the years up to 1895. 

The Board of Education has heretofore repudiated 
a portion of at least one of its contracts in and by which 
it was provided that at the termination of the lease the 
Board of Education would pay for the building standing 
on the premises at its appraised value, and based its re- 



79 

piidiation upon a legal technicality. The board denied 
that it had the power to enter into a contract binding it 
to buy the improvements on the termination of the lease., 
This provision is included in Mr. Crilly's lease and tends 
to make his rights, when the lease comes to an end, in- 
definite, uncertain and valueless. It may be that at the 
expiration of his term Mr. Crilly will not be able to re- 
ceive a single dollar for whatever improvements he may 
then have upon this property. 

3. The lease requires the lessee to pay as annual 
rental 6 per cent, of the value you place upon this prop- 
erty. The rate which is adopted in this city at the pres- 
ent time through universal custom among real estate 
owners, dealers and experts is four per cent. This dif- 
ference in rental places the lessee at great disadvantage 
when he is obliged to enter into competition with other 
lessees who pay only on a four per cent, basis. 

4. The uncertainty of the lease in the items above 
enumerated and in other particulars makes it impossi- 
ble for the lessee to obtain a loan upon his investment, 
large though it is. The lessee's investment in this prop- 
erty if made by him in almost any other equally legiti- 
mate enterprise would support a large loan at current 
rates of interest. We are prepared to show conclusive- 
ly, if you desire to hear proof on the subject, that a loan 
cannot be obtained upon Mr. Criily's investment in these 
premises. The great and valuable rights which the 
Board of Education will endeavor to show to you Mr, 
Crilly fortunately possesses by virtue of this lease are so 
uncertain, insecure and insubstantial that they are not re- 
garded by anyone able and anxious to make real estate 
loan as adequate security for any sum of money whatso- 
ever. 



80 

The uncertainty of the provisions of school board 
leases also creates litigation. It is safe to say that a 
large majority, if not all, the tenants of school prop- 
erty holding under leases like that of Mr. Crilly's, have 
been in litigation with the school board in all the differ- 
ent courts of this state, to the inconvenience, annoyance 
and great expense of all parties interested. This liti- 
gation has usually resulted in negotiations and compro- 
mises which in ordinary transactions between man and 
man would have been entered into in the first instance, 
making litigation and its attendant annoyance and ex- 
pense unnecessary. It is safe to say, however, that so 
long as these leases contain so many uncertain and in- 
equitable provisions no cessation of litigation is to be 
reasonably expected. 

5. It is in some cases impossible and in all cases im- 
practicable for the lessee to sublet any portion of his 
premises to a time extending beyond the day when the 
new revaluation is to take effect. It is impossible be- 
cause the lessee cannot secure a tenant who will agree 
to become liable for an increased rent unless the amount 
of such increase be known at the time and be definitely 
agreed upon. It is impracticable because no lessee is 
certain that he will be able to continue as lessee after 
the day on which the subsequent revaluation becomes 
effective, and if he were to make a lease subletting a por- 
tion of the premises to a time extending beyond the re- 
valuation date, and after the revaluation he should be 
obliged to surrender his own lease to the school board 
who might see fit to dispossess the tenant in possession, 
he would subject himself to liability for a large sum as 
damages for having entered into a contract which he 
could not perform. 



81 

These limitations make it almost impossible for the 
lessee to obtain a high class of tenants. The best ten- 
ants desire long term leases at a fixed annual rental. 
Mr. Crilly in following what you must commend as a 
first class business policy has been forced to decline to 
make any lease whatsoever with numerous high class 
individuals and corporations who wished long term 
leases at fixed rates, and has been compelled to enter 
into leases with less responsible persons at lower rates 
for the reason that he did not feel secure in executing 
leases extending beyond the first of May, 1905. In the 
few instances in which Mr. Crilly has executed leases 
extending beyond this date it was conclusively shown to 
him to be absolutely necessary to make these concessions 
or lose the tenants altogether. In entering into his pres- 
ent groimd floor leases, Mr. Crilly was obliged in each 
instance, in order to obtain the tenants, to give them a 
term extending to May 1, 1906, without a raise of rent 
for the year beginning May 1st next. In the event you 
find it necessary to increase the present valuation on this 
property Mr. Crilly by reason of the harsh limitations 
imposed upon him by this lease will be obliged to pay 
the increase for the first year himself without any re- 
turn whatsoever from his ground floor tenants from 
whom he obtains over fifty per cent, of his gross in- 
come. 

The offices in the building in question are now occu- 
pied as follows : 



82 



Restaurants 3 


Lawyers 


3 


Tailors 19 


Vacant 


3 


Agents' Display Rooms 13 


Promoters 


3 


Real Estate 12 


Business Chances 


3 


Salary and Chattel Loan 


Physical Culture 


2 


Business 5 


Boots and Shoes 


4 


Contractors 7 


Saloons 


4 


Mining Company Offices 4 


Miscellaneous 


10 


Osteopathy, etc. 6 


Cigars 


2 


Insurance 2 


Printers 


2 


Clothing 1 


Postal S'ub-station 


1 


Jewelry 3 







6. Not being able to obtain the highest class of ten- 
ants who occupy large amounts of space, pay their rent 
promptly, and afford a certain and definite income cov- 
ering a long period of years, it is necessary for Mr. 
Crilly to lease his premises to the best tenants obtain- 
able under all the circumstances. The class of tenants 
that can be had under these circumstances is largely 
small shopkeepers, tailors, printers, saloonkeepers, shoe- 
makers and the cheaper class of office renters. To a 
considerable extent tenants of this class are financially 
irresponsible, pay their rent in small amounts neither 
regularly nor promptly, and frequently only under threat 
of termination of their leases. In place of one respon- 
sible tenant occupying, for instance, an entire floor for a 
period of ten years, Mr. Crilly has a large number of 
tenants on each floor, of uncertain responsibility, from 
whom he does not obtain an aggregate rental equal to 
that which the one responsible tenant would pay him. 
The work and expense of collecting and bookkeeping and 
of maintaining the building are thus increased out of all 
proportion as compared with competitors dealing with 
tenants who occupy large space. 



83 

7. Under the terms of the ''amendment" it is proper 
for you to consider, if you deem it pertinent, the im- 
provements on the property, their value, etc., in arriving 
at the true cash value of the demised premises. Under 
this provision there is no incentive to the lessee to im- 
prove the premises, even though the other provisions 
of the lease would permit him reasonably to do so, for 
the reason that improvements would only add to the 
value of the premises and thereby result directly in an 
increase of the rent he would have to pay. 

8. The opinion of Judge Tuley quoted above sets forth 
at length the effect from a legal standpoint which the 
terms of the present lease would have upon the value 
of this property. 

Under the Recent Ruling of the Supreme Court 
School Property Under Lease is Liable to Taxation. 

The Supreme Court of Illinois in an opinion prepared 
and rendered by Mr. Justice Scott, late in February of 
this year, in the suit -of the People ex rel. Hanherg v. 
City of Chicago for use of Schools, etc., upsets the the- 
ory upon which the Board of Education and its lessees 
have dealt for the past forty years, and holds that a 
certain provision known as Section 2 of Article 8 of the 
Constitution of 1870, which has always heretofore been 
relied upon as exempting all school property from tax- 
ation, does not, as a matter of law, exempt from taxa- 
tion property owned by schools and leased by them for 
profit. When Mr. Crilly first contracted with the Board 
of Education for this property back in the year 1878, it 
was with the understanding on the part of both parties 
to the contract that the fee of this property was not 



84 

taxable. For this reason, the percentage which Mr. 
Crilly contracted to pay upon the appraised valuation 
of this property was set at six per cent, instead of five 
per cent., which was the then going rate. The additional 
one per cent, was added to Mr. Crilly 's rental because 
it was considered to be about the equivalent of the 
amount he would be obliged to pay as taxes if he were 
leasing the property from an individual owner. How- 
ever, in order that the Board of Education might cer- 
tainly be protected against liability for taxes in the event 
the property was held to be taxable the following pre- 
vision was inserted in the lease : 

"And the said party of the second part, for them- 
selves and their heirs, executors, administrators and 
assigns, further covenant and agree to and with the said 
party of the first part, its successors and assigns, that 
during the continuance of this lease they will pay all 
water rates, and all taxes, duties and assessments, gen- 
eral and special, ordinary and extraordinary, of every 
nature and kind whatsoever, which may be levied, im- 
posed or assessed upon the premis&s herein demised, or 
upon any building, addition or improvements of any kind 
which may hereafter, during the continuance of this 
lease, be erected, made or placed thereon, whether such 
tax, duty, rate, or assessment shall be for city, county, 
state, or other purposes soever." 

Under this provision Mr. Crilly 's item of expense will 
be increased from $6,000 to $7,000 a year if the property 
is assessed at $540,000, the valuation on which rent is 
now being paid. As shown below, Mr. Crilly 's net in- 
come from this property during its six most prosperous 
years averaged only a little in excess of ten thousand 



85 

dollars per year. If it had been necessary for him to 
pay taxes on the fee during this time his net income 
would have been reduced to such an amount as to leave 
him no return worthy of mention on his investment in 
this property. 

CoMPETITIOlSr. 

We submit herewith a list of modern office buildings 
erected in the loop territory since the year 1895, giving 
the total number of new offices that have come into com- 
petition with those in Mr. Crilly's building. At the pres- 
ent time we are on the high tide of prosperity. The de- 
mand for offices was never so great. The value of prop- 
erty was never so high, and the rents demanded and 
received are breaking all previous records. There has 
been no touch of ''hard times" since the effects of the 
panic of '93 passed away. The value that you place upon 
this property is to be the basis upon which Mr. Crilly is 
to pay rent up to the year 1915. It is within the knowl- 
edge of all that there is a recurrence of hard times in all 
countries in which business is actively engaged in at 
least once in every twenty years. The competition of all 
these new offices added to the vast number of offices that 
were already in existence in 1895 will not perhaps be se- 
verely felt by any of these buildings until the return of 
hard times, but when those times do come it is abso- 
lutely certain that the first buildings to suffer from them 
will be those of the class of buildings of which Mr. Cril- 
ly's is one. Indeed, there is no certainty that when the 
First National Bank Building opens up its hundreds of 
new offices for occupancy there will not be a dearth of 
tenants in the down town district. And all the time it is 
to be borne in mind that Mr. Crilly's building is not 



86 



available to all classes of tenants, as are the large mod- 
ern office buildings. It should be borne in mind, too, 
that as most of the other buildings are figured on a four 
per cent, basis Mr. Crilly, who is obliged to pay on a six 
per cent, basis, must add to his item of expense at least 
two per cent, of the value of the fee, or $10,800, on his 
present valuation, an increase which is certain to con- 
sume his entire margin of profit. 

Some of the buildings above referred to, which have 
been opened for business or erected since the last ap- 
praisal in 1895, are as follows : 



Tribune Building 


144 xl20 


17 


stories 


Hartford Building 


921/2X 50 


2 


stories added. 


Hartford Building Addition 


45 xlOO 


14 


stories 


First National Bank Building 


192 x230 


16 


stories 


Marquette Building 


190 x(114) 
(140) 


16 


stories 


Ashland Block Addition 


41 1/2 X 80 


16 


stories 


Atwood Building 


63 X 80 


10 


stories 


Rector Building 


901/2X 93 


13 


stories 


Fort Dearborn Building 


90 X 78 


4 


stories added. 


Fort Dearborn Building Addition 


30 X 90 


16 


stories 


Merchants Loan & Trust Bldg. 


99 xl80 


12 


stories 


Eialto Building 


1741/2x1571/2 


2 


stories added. 


New York Life Building 


80 xl41 


2 


stories added. 


New York Life Bldg. Addition 


80 X 90 


14 


stories 


National Life Building 


88 ■ x210 


12 


stories 


Lees Building 


70 xll9 


14 


stories 


Stewart Building 


90 X 911/2 


12 


stories 


Chicago Savings Bank Bldg. 


120 X 48 


14 


stories 


Republic Building 


144.9 xlOO 


12 


stories 


Trude Building 


75 xl04 


14 


stories 


Heyworth Building 


180 X 80 


19 


stories 


Silversmiths Building 


80 xl70 


10 


stories 


Church Building 


40 xl70 


12 


stories 


Powers Building 


76 xl72 


14 


stories 


A. C. McClurg Building 


80 xl73 


9 


stories 


Cable Building 


90 X 46 


10 


stories 


Railway Exchange Building 


171 xl71 


17 


stories 


New Building at 92-96 Washington St. 


601/8 X 90 


3 


stories 


Majestic Theatre Building 


81 xl92 


20 


stories 


Chapin & Gore Building 


81 X 80 


8 


stories 


Great Northern Office Building 


100 xl65 


16 


stories 


Fisher Building 


70 XlOO 


18 


stories 



87 



New Leases With the National Safe Deposit Company 
AND THE Tribune Company. 

We respectfully call your attention to the new 99 year 
leases without revaluation that were entered into by the 
Board of Education with the Tribune Company in 1895, 
1897 and 1899, together covering the entire corner, and 
with the National Safe Deposit Company in 1900. It is 
true that under the Tribune leases the valuation on which 
it is to pay after 1915 and under the National Safe De- 
posit lease the valuation on which it is to pay after 1908, 
exceeds the valuation on which Mr. Crilly is at present 
paying, as hereinafter shown. The reason for these 
higher valuations is undeniably that there is no revalua- 
tion clause contained in the leases. The elimination of 
such a clause has worked to the benefit of the school 
board by giving it higher rentals and also in giving it 
abundant security in the shape of the magnificent new 
buildings on which it has a lien to secure the faithful 
performance by the lessees of their contracts. We re- 
spectfully insist that the valuation now to be placed by 
you upon the Crilly corner should not be in excess of its 
present valuation, namely, $540,000, for to increase it 
would be to do Mr. Crilly a great injustice as compared 
with these near by competitors. 

In this connection you should not fail to note that in 
entering into these long term leases without revaluation 
the school board has established a value for these corners 
which in all fairness to other lessees should conclusively 
determine the value of other school property in this vi- 
cinity. In entering into the Tribune and National Safe 
Deposit leases it cannot be denied that a higher value 
than the then existing cash value was placed upon the 



88 

property in order to discount the future increase and 
arrive at a figure wliich should be the average value for 
the full 99 years. The school board must have had in 
mind in 1900, when it closed with the National Safe De- 
posit Company, that in 1905, for instance, property 
would be more valuable than it was in 1900, and that it 
might still be more valuable in 1910 than in 1905, and, in- 
deed, that it might increase in value until the termina- 
tion of the lease. It is therefore certain that the value 
agreed upon was in excess of the then cash value of 
the property and that it was in excess of the cash value 
of the property at the present time. 

The following schedule shows the size, full annual 
rental at six per cent., square foot annual rental, and 
square foot value of the corners leased by the Board of 
Education to the National Safe Deposit Company, the 
Tribune Company and D. F. Crilly, respectively; also 
like figures showing what Mr. Crilly would be obliged 
to pay for a long term lease on his property at the same 
rate as the National Safe Deposit Company will pay 
under its present lease from 1908 to 1999, and also at 
the same rate as the Tribune Company is to pay under its 
present lease from 1915 to 1985. 

Full Sq. Ft. 
Size in Sq. Ft. annual annual Sq. Ft. 
Feet area rent 6% rent value 

First National Bank 192x107 20544 

To 1908 $50,148 $2.44 $40.67 

From 1908 to 1999 54,000 2.63 43.80 

Tribune 144x120 17280 

To 1905 $45,120 $2.61 $43.51 

From 1905 to 1915 47,376 2.74 45.69 

From 1915 to 1985 47,640 2.76 45.94 

D. F. Crilly 104x120 12480 

Under present lease $32,400 $2.59 $43.27 

' At National Safe Deposit Co. 's 

valuation from 1908 to 1999 32,422 2.63 43.83 

At Tribune Co. 's valuation 

from 1915 to 1985 34,445 2.76 45.95 



89 

The above figures show that the Tribune Company 
is to pay rental for eighty years at six per cent, on a 
valuation of $45.95 per square foot, and that the Na- 
tional Safe Deposit Company is to pay rental for nine- 
ty-one years on a valuation of $43.80 per square foot. 
The value of the Crilly corner at the bank's rate would 
be $547,000, and at the Tribune's rate $573,460. All 
things taken into consideration, the property occupied 
by Mr. Crilly is not so valuable per square foot as that 
occupied by either of these two companies. Madison 
street property has for many years been valued higher 
than that on Monroe street. The First National Bank 
property has less depth than the Crilly property and 
is proportionately more corner. 

Mr. Crilly of course cannot be expected to pay on a 
valuation as high as that of the Tribune and National 
S'afe Deposit Company unless his lease, like theirs, shall 
be free from revaluation. 

New 99 Year Lease Without Revaluation Covering Lots 
Immediately East. 

On May 8, 1902, a lease was entered into by the Board 
of Education covering what is known as the Chapin & 
Gore and Boomer properties immediately to the east of 
the Crilly property, 81 feet on Monroe street by 192 feet, 
both sides and the rear surrounded by public alleys 15 
feet wide. The rental of this property from 1905 to 2001 
is $27,000, making the square foot value at six per cent. 
$28.93, and square foot rental $1.73. A twenty story of- 
fice building is now in process of erection by Mrs. Leh- 
man, present owner of the lease, and when opened to the 
public will bring into competition with Mr. Crilly 's 
building a large additional amount of office space. 



90 



Othee Recent Moneoe Street Valuations. 

The projDerty at 140 to 146 Monroe street, immediately 
adjoining the Chicago National Bank on the east, is 
under lease from John Borden, owner of the fee, Warren 
Springer being the present tenant. It fronts 90 feet on 
Monroe street and is 190 feet deep running back to an 
alley. The appraisers provided for by the lease not hav- 
ing been appointed, a bill was filed in the Superior Court 
of Cook County praying that a valuation be placed on 
the property. The hearing was had before Judge Chy- 
traus, who found the value of the property on January 1, 
1902, to be $5,000 a front foot, or $26.30 per square foot. 
A decree was entered accordingly and was affirmed by 
the Branch Appellate Court and by the Supreme Court 
of this state. The case is entitled Springer v. Borden, 
and is reported in 210 111. 518. 

The valuation of the property now occupied by the 
Inter Ocean, at 106 to 110 Monroe street, was also deter- 
mined in a proceeding in equity in the Circuit Court of 
Cook County before Judge Hanecy. The property fronts 
69| feet on Monroe street and runs back 190 feet to an' 
alley. It was valued by Judge Hanecy at $4,000 a front 
foot on May 1, 1901, or $20.90 per square foot. This val- 
uation was affirmed by the Supreme Court in the case 
of the Columbia Theatre Amusement Co. v. Adsit, 211 111. 
124. 

Recent Leasehold Sales. 

Recent sales of the Unity Building at 79 Dearborn 
street, Stewart Building at the northwest corner of State 
and Washington street, and the Medinah Temple at the 
northeast corner of Jackson boulevard and Fifth ave- 



91 

nue, call to mind the disastrous history of those proper- 
ties and very forcibly illustrate the folly of lessees agree- 
ing to pay ground rental on an excessive valuation. 

In the case of the Unity Building the stockholders suf- 
fered a total loss and the bondholders received only 75 
per cent, of their investment. The Unity Building, 80 x 
120 feet, was leased in 1890 for 99 years at 4 per cent, on 
$450,000, or $18,000 per annum. A building was erected 
on the ground at a cost of about $800,000. A bond issue 
of $300,000 and a second issue of $100,000 were secured 
by first and second liens upon this property. Default in 
interest having been made, foreclosure proceedings were 
instituted resulting in wiping out the stockholders ab- 
solutely. All outstanding bonds, which represented the 
entire ownership of the lease and building, were sold in 
December of last year for the sum of $307,000, or 39 per 
cent, of the original cost of the building. 

In the case of the Stewart Building, 91^ x 90 feet, this 
building was leased May 1, 1893, for 102 years ; for the 
first three years at $47,350, for the following five years 
$57,500, for the following five years $65,000, and for the 
remainder of the term $75,000 per annum. The ground 
belonged to the heirs of Gen. H. L. Stewart and was 
leased to H. H. Kohlsaat. In 1896 the present building 
was erected at a cost of $600,000. Default was made in 
payment of ground rent and the building passed into the 
hands of the Northern Trust Company, as receiver, rep- 
resenting the owners of the fee. In January, 1905, the 
leasehold and the building were purchased by E. A. Shedd 
and A. M. Johnson for $300,000. 

The Medinah Temple property, 110 feet on Fifth ave- 
nue by 115 feet on Jackson boulevard, was leased to Wm. 



92 

A. Griles in 1888 for 99 years at an annual rental of ap- 
proximately $14,000. In 1892 Mr. Giles sub-leased the 
property for 95 years to the Medinah Temple Company 
at an annual rental of $24,000. The construction of a 
building was immediately begun and a bond issue of 
$400,000 proving inadequate $350,000 more was raised 
by the issue of stock to complete the structure. The 
building cost $750,000. Default in interest on the bonds 
brought about foreclosure proceedings in 1897, and at a 
sale of the property in October, 1901, only $300,000 was 
realized for the bondholders. An option was held by 
David Mayer on this property at $350,000, but Mayer de- 
clined to purchase at that price. In February, 1905, the 
leasehold and building were sold to Levy Mayer for $325,- 
000, or about 40 per cent, of the original cost of the 
building alone. 

Leasehold Failuees. 

As hereinabove pointed out, it is absolutely certain 
that some time during the next ten years there will be a 
slump in real estate values and a falling off in the demand 
for office space in consequence of decreased activity in the 
business world. It will undoubtedly be conceded that dur- 
ing good times such as at present avail the lessees of 
school property should share with all members of the 
community at large in the extra margin of profits that is 
to be made. These extra profits will be sorely needed at a 
later time to make up for smaller profits made or losses 
which are certain to be sustained before the next revalua- 
tion period arrives. 

Any conservative business man or corporation such as 
the school board would desire to have as a lessee of this 



93 

property, in entering into a contract of lease, could not 
fail to take into consideration tlie history of downtown 
leases showing losses to the lessees aggregating millions 
of dollars. Among the buildings which have proved a 
total loss to lessees, and which have been forfeited to the 
owner of the fee, are the following: 

Kedzie Building, at 120 Randolph street; 

Griddings Building, at 155-157 Washington street; 

Eeal Estate Board Building, on which the ground 
rental was based on a value of about $35 a square foot; 

Fay property, at 55 Dearborn street, lease based on 
a value of $18 per square foot ; and 

Steinway Hall. 

The Auditorium., rented on a ground value of $19 a 
square foot, has never paid but one 2 per cent, dividend, 
and the stock is a drug on the market at 10 cents on the 
dollar. 

The Masonic Temple has paid no dividends until with- 
in the past few years, and the amounts so paid have been 
inconsequential. 

The Security Building, at Madison and Fifth avenue, 
was sold by the owner at about one-third its cost. 

The Schiller Building, on Randolph street, was in- 
volved in receivership proceedings, resulting in a total 
loss to the stockholders. 

The Opera House Block is said to have a total income 
amounting to less than the rent and charges of opera- 
tion and maintenance. 

The Woman's Temple, leased on a valuation of $44 
per square foot, has long since passed from the control 
of the stockholders and is now in the hands of bond- 
holders. 



94 

Other buildings that have been a serious loss to the 
owners are the following: 

Illinois Bank Building, at 115 Dearborn street; 

'^L" shaped building surrounding the old Inter Ocean 
Building, at the corner of Madison and Dearborn 
streets ; 

Bort Building, in Quincy street ; 

Building at 126-128 Washington street; 

The Building, at 120 Monroe street, and the 

Great Northern Office Building. 

Crilly^s Eent Increased One Hundred and Sixteen 
Per Cent, in 1895. 

The following table shows the appraised value of all 
the Dearborn street frontage in Block 142 prior to the 
189'5 appraisal, together with the appraisal of that year, 
and the percentage of increase, and like figures concern- 
ing the First National Bank property, whose appraised 
value in 1893 was determined by Judge Tuley after a full 
hearing : 

Lots 1885 

Lessee Value 

12, 13 and 14 Tribune Co. $300,000 

15 and 17 Tribune Co 96,000 

16 Tribune Co 48,000 

18 and 19 Cummings 102,000 

20 and 21 Chambers & Farwell 102,000 

22 and N. 16 ft. of 23 Wilson 80,000 

S. 8 ft. of 23, and 24, 

25, 26 and 27 Crilly 250,000 

Lot 17 in Block 119. National Safe D. Co. 480,000 

From this table it appears that Mr. Crilly 's increase 
was more by 30 per cent, than that of any other lessee 
of school property on Dearborn street. It is to be as- 
sumed that all prior valuations placed upon these dif- 



1895 


Per C't 


Value 


Inc. 


$500,000 


67 


168,000 


75 


84,000 


75 


190,000 


86 


187,000 


83 


133,000 


67 


540,000 


116 


820,800 


71 



95 

ferent lots in Block 142 have been established very 
largely with reference to- each other. In view of these 
facts it must be apparent to you that it will be impos- 
sible for Mr. Crilly to snccessfully compete with the 
other owners of property in this block and in the block 
adjoining on the west unless the valuation you place 
upon his corner is made with reference to the valuations 
placed upon the properties of these competitors and with 
reference to the ten year revalution clause which de- 
creases the value of the fee to the school board and of 
his lease to Mr. Crilly. 

Lessef/s Investment. 

When this building was first erected it was built in 
the most substantial manner then known to builders, 
having special reference to its occupancy by the J. M. 
W. Jones Printing Company, which was at that time 
the largest printing concern in the City of Chicago and 
occupied the entire building, then consisting of five floors. 
The printing company at all times carried large stocks 
of heavy paper and ran, day and night, large printing 
presses. The foundation, walls and floorings of this 
building are beyond question the best of those of any 
building in the city outside of building of modern con- 
struction. The lessee's investment in tliis building, com- 
pleted about 1880', was $130,000'. After the printing com- 
pany left the building it was entirely remodeled, two 
stories were added to its height, and it was made into 
a store and office building, with hardwood finish and all 
modern improvements, at an additional cost of $157,000. 
Since the complete remodeling of the buildings addi- 
tional hardwood and glass partitions have been put in, 
the entrance made over, new boilers have been sub- 



96 

stituted for the old ones, and alterations and improve- 
ments have been made, which bring the amount of the 
lessee's investment in this property at the present time 
up to the sum of $300,000. 

The following statement shows the average gross an- 
nual income from and expenses on account of the build- 
ing for six years from May 1, 1898, to April 30, 1904, 
inclusive, the most favorable years of lessee's entire 
term: 

Income $88,702.28 

Rent $32,400.00 

Taxes, insurance, repairs, em- 
ployes, lighting and other ex- 
penses of operating and main- 
taining 30,931.65 

Depreciation, 5% on $300,000.... 15,0O0'.0O 
Net to lessee 10,370.63 

$88,702.28 $88,702.28 

As five per cent, per annum on $300',000i invested is 
properly chargeable as depreciation against the income 
of the building from May 8, 1890, to May 8, 1895, Mr. 
Crilly's investment in this property would be reduced 
at the beginning of the present valuation period to 
$225,000. Depreciation at the same rate for the ten 
years of the present period would reduce his investment 
on May 8th next to $75,000, making his average invest- 
ment during the present valuation period $150,000', of 
which sum the net annual income of $10,370.63 is 6.9 per 
cent. 

It must be conceded that an average net income of 
less than seven per cent, per annum during the six best 
years that lessee has experienced is not an unreason- 
able return upon so uncertain an investment. Mr. Aldis, 



97 

in the testimony to which we have above referred, states 
that a. lessee under a contract like Mr. Crilly's is en- 
titled to a net return on his investment of eight per 
cent. 

If, as seems inevitable, this building must be destroyed 
to give place to a modern structure the 5 per cent, de- 
preciation allowed would make it necessary for the 
building to stand in its present condition until the year 
1910. If it is destroyed before that year the rate of de- 
preciation would have to be increased proportionately in 
order that Mr. Crilly might have returned to him the 
total amount of his investment in this building at the 
time of its destruction. 

Business Activity Ceetain to Deceease. 

The Board of Education by the terms of its contract 
of lease has a first lien upon the improvements on this 
property to secure the performance by the lessee of all 
that he contracts to do. It is not probable that the lessor 
will be called upon to enforce this lien during periods of 
commercial prosperity. During periods of depression, 
however, the school board cannot but feel that the lien 
so retained will secure to it full and proper payment of 
all money due under the lease. It is not so, however, 
with the lessee, who has no one to guarantee to him 
that during hard times he will receive enough money to 
pay his rental and other fixed charges. The rent he has 
been obliged to pay has always increased, his expenses 
of operation are continually and alarmingly growing 
larger and larger each year. But his rental income has 
at times decreased and is liable to do so again at any 
time. 



98 



Peesent Eeal Estate Maeket Artipicialt. 

The great activity experienced in the last two years 
in down town real estate in particular has created an 
artificial impression of values which must not be taken 
to be actual values. Many who have purchased during 
the past two years at prices which are undoubtedly in 
excess of true cash value will certainly within the next 
decade suffer financial loss by reason of their untimely 
investments. The ^ ^Economist," the leading conserva- 
tive newspaper authority on Chicago real estate, says in 
its issue of January 14, 1905, concerning Block 142: 

''Down town property seems to be at about as high 
a figure as it can be reasonably expected to go for many 
years." 

Mr. Arthur Aldis, in his testimony before the Board 
of Appraisers of ten years ago, said concerning down 
to^m values in Chicago: 

"I know of no place in New York or in Boston or 
Philadelphia or London or Berlin or Paris where the 
same conditions exist. It is the most expensive retail 
property I know of in the world." 

Ceilly Propeety Not All Coenee. 

Again referring to Mr. Aldis' testimony given before 
the appraisers of 1895, he testifies with reference to 
the Equitable Building at the corner of Dearborn and 
"Washington streets, which was then owned by him, that 
he would have paid as much when he purchased the lot 
and building if it had been only 36 instead of 40 feet in 
width. His testimony shows that 36 feet front is all that 
can properly be figured as corner property. He further 
testified that the 40 feet next to the corner 40 feet cov- 



99 

ered by the Equitable Building on Washington street 
was worth not more than one-half the corner 40 feet, and 
that the value of inside lots would decrease the farther 
they went from the corner. 

Lease Profitable to School Boaed. 

Mr. Crilly has during all of his residence in the city 
of Chicago, which covers nearly 45 years, been a builder, 
an owner and manager of buildings. The management 
of buildings has for the past 20 or 25 years been almost 
his exclusive business. He has been a lessee of the 
school board since 1878, His rents have been paid with 
a promptness that has been entirely satisfactory to his 
lessor. He has placed a good building upon the prem- 
ises, giving the school board good security, and in every 
other way has so handled and managed the property as 
to give the school fund a splendid income and himself a 
small return on his investment. It is safe to assume 
that the large increase in Mr. Crilly 's rent, which was 
forced upon him by the appraisal of ten years ago, was 
due in part to the good showing of earnings disclosed in 
his statement to the 1895 appraisers. The earnings of 
this property prove not only tJiat it is well improved, 
but that it is well managed. A deficit would tend to 
show either lack of business ability or bad faith on the 
part of the lessee in not putting up a sufficient building 
and in not properly managing it. 

Space Eequired for Court. 

The space at the northeast corner of the lots in ques- 
tion, 60x40 feet, is used as a court for light and air, and 
is not improved above the first floor. This takes 2,400 



100 

square feet from the space available for renting on eacli 
of the six upper stories of the building, or one-fifth of 
each floor. There is no other or better way to provide 
for light and ventilation in a building of this size. The 
most desirable arrangement is for an interior court, 
which is impossible in a building.no larger tlian this. 
The result is that on each floor there are several ofSces 
poorly lighted and poorly ventilated, thereby detract- 
ing from their rental value. 

A building much larger than the present one requires 
very little, if any, more space for a court. The particu-: 
lar size of this lot makes it necessary to use for a court 
a maximum of space with a minimum of results. - 

Property too Small for Best Paying iNVESTMH-iNrT. :^: 

The Tribune Company found it necessary, in- order -to 
make an improvement on its corner which would give 
a fair net retarn on the investment, to purchase the 
leasehold interest to the 72 feet immediately adjoining 
its 72 feet on the corner, giving it a frontage on Dear- 
born street of 144 feet. The First National Bank like- 
wise made no arrangements to build- on its 107 feet on 
Monroe street until it had acquired 224 feet additional. 
The owners of the Marquette, Fort Dearborn, Hartford 
and other buildings have satisfied themselves that the ad- 
ditional space which they have added and are adding 
to their respective buildings will increase the net return 
on their entire investment. Mr. Grilly is satisfied from 
his knowledge of modern buildings that a frontage of 
104 feet is too small to produce the best net return. A 
building on this corner fronting 144 feet on Dearborn 
street would require very little, if any, more court space, 
and the expense of operating it, except as to janitor 



101 

service, would not be materially increased over the ex- 
pense of operating a building with a frontage of only 
104 feet. 

NuMBEK OF People Daily in and Near Building. 

It will no donbt be urged that there are many people 
daily in and near this building. This is the fact, just 
as there are many people daily in and near every cor- 
ner building in this portion of Chicago. It is to be re- 
membered, however, that the people who are near the 
building are not the ones who lend it value. It is the 
people who actually go into the building to transact 
business whose presence is profitable. There is not a 
bank, trust company, manufacturing institution, railroad, 
coal or other large business concern in the entire build- 
ing with the possible exception of one or two ground 
floor tenants who are there more for the purpose of ad- 
vertising their particular shoes and cigars manufactured 
and sold all over the country than with the hope of se- 
curing a profitable trade in these particular stores 

Can the BiriLDiNG do Better? 

The best use to which this property can be. put under 
present limitations properly enters into a determina- 
tion of its value. As a modern structure cannot be 
erected in place of the present building, and as the most 
desirable class of tenants therefore cannot be obtained.^ 
it is proper to consider what can be done with the prop- 
erty to make it yield the largest certain income to the 
school fund and to the lessee. It can be shown, and we 
offer to prove if you desire to hear proof on the subject, 
that the present building is as good a building of it^ 



102 

class as there is in the city of Chicago; ttiat at the time 
it was remodeled to its present size it was built practic- 
ally fire proof and was equipped with all the then mod- 
ern improvements. The building is still in first class 
condition and cannot be improved upon unless replaced 
by a new and modern strncture. It is safe to assume 
that in its present condition the property is better im- 
proved than it ever will be until an agreement is arrived 
at between the parties which will permit a new building 
to be erected on this corner. It is also safe to assume 
that no higher or bettor rentals can be obtained by any 
lessee of this corner under existing circumstances at any 
time now or in the future than are being obtained by 
your present lessee at the present time. Under these cir- 
cumstances, then, it would be well to examine closely into 
the statements presented by Mr. Crilly with reference 
to the income from and expense of maintaining this 
property, and to determine after a thorough investiga- 
tion whether Mr. Crilly would be justified in paying any 
increase in rental over and above that which he is now 
paying. 

Six Per Cent. Eate Does Not Increase Value of Fee. 

It would not be proper to add to the value of this 
property because of the fact that the lease calls for 
a return of 6 per cent., rather than 4 per cent. Certain- 
ly it would never be thought that a lessee must be made 
to pay moie rent by raising the value of the property 
because the rental fixed in his lease is high and con- 
sequently the property more valuable, and it would be 
equally unjust that he should pay less by reducing the 
valuation because his lease calls for a low rate and 
therefore the property is less valuable. If the high rate 



103 

of rent could be taken into consideration a lease under 
very favorable terms to the lessor would be made still 
more favorable to Mm by showing that the terms of the 
lease add to the value of the property. An increase in 
the value of the property would be equal to an increase 
of rent and the increase of rent would increase the value 
of the property, and so on indefinitely. Such a rule for 
determining values would be wholly impracticable, as it 
would afford no definite and certain basis from which to 
figure. 

What the \'''alue Shoitld Be. 

The valuation on which the National Safe Deposit 
Company is to pay rent from 1908 to 1999 is $43.83 per 
square foot. For the reasons shown above this is un- 
doubtedly the estimated average value for the term and 
is in excess of the true cash value at the present time, 
and is also based upon the added value given to the 
property by reason of the elimination of the revaluation 
clause from the lease. Conceding for the moment that 
Mr. Crilly should pay rent under his limited lease on a 
valuation equal to that on which the National Safe De- 
posit Company pays under its iinlimited lease, his cor- 
ner would be valued at $547,000, making his rental 
$32,820. 

The valuation on which the Tribune Company is to 
pay rent from 1905 to 1915 under its new unlimited 
lease is $45.69 per square foot. If Mr. Crilly were to pay 
on a like valuation for tlie next ten years under the lim- 
itations of his present lease, his annual rental would be 
$34,200, and the value of the property $570,000'. 

Can any good reason be advanved why Mr. Crilly, 
limited on all sides as he is by the terms of his lease, 



104 

should pay from 1905 to 1915 a rental equal to that to be 
paid for the same time b}^ the Tribune Company which 
has the benefit of a 99 year lease without revaluation 
and owns a large and modern building from which to 
derive its income! Is tbere anyone to say that the 
National Safe Deposit Company should pay a less ren- 
tal for the next ten years under a more valuable lease 
covering a more valuable piece of property, than Mr. 
Crilly should be obliged to pay for the same time under 
an admittedly less valuable lease covering less valuable 
property I The fact is, the value of school property in 
this particular part of town must be conceded to be well 
settled and established by these long term leases with- 
out revaluation. 

The Board of Education undoubtedly does not de- 
sire that the rent demanded shall be so great as to 
compel a surrender of the lease or otherwise work a 
hardship upon the lessee. Its primary concern should 
be that the rent shall be the highest that can be safely 
paid by the lessee, allowing to him an income on his 
investment equal to that enjoyed by the Board of Edu- 
cation. Mr. Crilly certainly expects that the terms of 
the lease will permit him to make a reasonable return 
on his investment. It would not be to the advantage of 
the school fund or the public to exact terms that would 
result in a forfeiture of the lease. Confiscation of the 
property is not desired by the Board of Education, and 
if forced upon the lessee would not result to its advan- 
tage. The best contra(;t for the Board of Education, 
from a commercial point of view, is the one which is 
safest and can be most surely performed by the other 
party, looking not only to the present, but over a term 
of years extending some time into the future. Thus far, 



105 

covering a period of 27 years, the present lessee ]ias 
made this corner a paying proposition for the school 
board, with only a small return to himself, and does not 
now desire nor does he expect to have such a valuation 
placed upon the propeity as will force him to forfeit his 
contract. He cannot, however, be entirely unmindful of 
the consequences that have followed upon the agreement 
of other lessees to pay rental on an excessive valuation. 
Ho therefore urges you, after considering the question 
at issue from the viewpoint of the Board of Illducation, 
to place yourselves for the time being in his own posi- 
tion as lessee of this property, and to decide each of 
you for himself in his own mind and according to his 
own best judgment just what each of you, if in Mr. Cril- 
ly's place, would be able and willing to pay as rental for 
these premises during the next ten years under all the 
attending facts and circumstances. 

We respectfully submit that due consideration being 
given to all of the limitations imposed by the terms of 
the lease with Mr. Crilly, no contention that will be ad- 
vanced by the Board of J^lducation can impel you to place 
a valuation on this property equal to that placed upon 
the corners occupied by the National Safe Deposit Com- 
pany and the Tribune Company whose leases are free 
from unreasonable and vexatious limitations. 

Respectfully^ Ru])mittecl on behalf of Daniel F. Crilly. 

Cassoday & Butler, 
Oliver D. Crilly 

His Attorneys. 



106 



STATEMENT OF BOARD OF EDUCATION IN 

EEPLY TO STATEMENT IN BEHALF OF 

DANIEL F. CRILLY. 

To the Honorable Board of Appraisers of School Prop- 
erty of the City of Chicago : 

In the matter of the lease of Daniel F. Crilly from the 
Board of Education of the City of Chicago of the prop- 
erty situated at the northeast corner of Dearborn and 
Monroe streets in said city, described as the south eight 
feet of lot 23 and all of lots 24, 25, 26 and 27 in block 
142 in school section addition to Chicago, having a front- 
age of 104 feet on Dearborn street and a frontage of 
120 feet on Monroe street to a 15 foot alley on the east 
end of said premises. 

Under the terms of the said lease and supplements 
thereto, your honorable body is convened to ascertain 
the present cash market value of the fee, as described 
in said lease, and we Jierewith present to you the facts 
which we consider will aid you in arriving at a proper 
decision as to s.uch value, the same being the principal 
sum upon which the amount of rent will be annually com- 
puted for the ensuing ten years. 

We wish first to bring specifically to your attention 
the fact that your deliberations must be confined entire- 
ly to the ascertainment of the value of said fee, and 
that your duties in no way involve the determination of 
the value of Mr. Crilly 's lease. That has no proper 
place in your deliberations and cannot in any way affect 
the final determination by you of the market value of the 
land as such, of this date exclusive of the improvements 
and the leasehold, which is the only question for your 
solution.. 



107 

This statement is here first made because of the fact 
that a large part of the statement of Mr. Crilly is com- 
posed of arguments, which affect only his leasehold in- 
terest and which are entirely irrelevant to the question 
to be determined by you. Among these are: 

First: The difference in value between a ninety-nine 
leasehold, without revaluation clause therein, and one 
with the same inserted. 

Second: The effect of the lease itself upon the prop- 
erty. 

Third: The possibility of the lessee having to pay 
taxes upon the land. 

Fourth : Competition. 

Fifth: Recent leasehold sales. 

Sixth: Leasehold failures. 

Seventh: Lessee's investment. 

Eighth: Income of buildings. 

Ninth: Rental specified in the lease. 

In this connection we call your Honorable Board's 
attention to the decision of the Supreme Court of the 
State of Illinois, reported in Volume 210, page 518, in 
the case entitled Warren Springer v. John Borden, which 
case involved the question of the valuation of a fee in 
property on Monroe street ,iust west of Clark street in 
this city under the terms of a leasehold providing for a 
revaluation each ten years during its life, where the 
court said: 

"The lease provided that the lessee should pay as 
rent a s.um equal to five per cent, of the cash value of 
the demised premises, exclusive of the buildings and 
improvements which might be tliereon. . There was a 



108 

building on the premises and the lease had twenty years 
to run in the future. Defendant insisted, and offered 
evidence tending to prove, that the existence of the lease 
depreciated the value of the fee and restricted the use 
to which the property could be devoted, and would de- 
preciate the value of the property to a purchaser from 
fifteen to thirty-five per cent. The principal contro- 
versy between the parties arises on that evidence, and 
is, whether the court, in fixing the cash value of the de- 
mised property, exclusive of the buildings and improve- 
ments, was bound to take into consideration the effect 
of the lease on the value of the fee. The court held that 
all evidence as to the effect of the lease on the value of 
the premises was immaterial and incompetent, and re- 
cited in the decree that the valuation was made without 
taking into consideration any effect of the lease on the 
value of the premises. The court construed the value of 
the demised property as contained in the lease to mean 
the cash value of the naked lot with a clear title in fee 
simple. The defendant insisted that the court ought to 
find the cash value of the fee simple as depreciated by 
the lease ux)on it, or in other words, the cash value of 
the reversion. 

^'The term of the lessee and the reversion after the 
expiration of the particular estate together constituted 
the entire fee, and under our statute the grantee of the 
reversion would be entitled to the rents. Anyone buying 
the reversion would pay more if the lease called for ten 
per cent, per annum on the value than if it called for 
five, as in this case, and would pay more if the lease 
called for five per cent, than if it called for four, which 
the evidence showed to Ite the basis for the market value 
of such estates when the cause w^as heard. Certainly, it 



109 

would never be thouglit that a tenant must pay more 
rent by raising the value of the reversion because the 
rental fixed in his lease is high and consequently the 
reversion more valuable, and it would be equally unjust 
that he should pay less by reducing the valuation because 
his lease calls for a low rate and therefore the reversion 
is less valuable. The value of anything, in the common 
understanding, is the value of the full title, and not a 
value over and above some encumbrance. The cash value 
of the lot, exclusive of the buildings and improvements 
thereon, can mean nothing else than the value of the 
full title to the lot. According to the theory of defend- 
ant, a lease under very favorable terms to the lessee 
may be made still more favorable to him by showing 
that the terms of the lease depreciate the value of the 
reversion. A reduction in the value of the reversion 
would be equal to a reduction of rent, and the reduction 
of rent would reduce the value of the reversion, and so 
on in endless succession. The rule contended for is 
wholly impractical, for the reason that as long as the 
net annual rental is unknown the net value of the re- 
version cannot be ascertained, one of the necessary ele- 
ments for fixing such value being lacking. No such plan 
for fixing the rental could have been anticipated by the 
parties. Our conclusion is in accord with the decision 
in Goddard v. King, 40 Minn. 164, and it is supported 
in principle by Philadelphia Lihrory v. Beaumont, 39 Pa. 
St. 43, and Lowe v. Bro'fm, 22 Ohio St. 463. The value 
of the property for the purpose of fixing the rents could 
neither be increased by the fact that the burden on the 
lessee was great and the terms of the lease favorable to 
the lessor, nor reduced by the fact that the burden was 
light and the lease favorable to the lessee. 



no 

''There is considerable complaint of the rulings of 
the court on the admission of evidence, but we do not 
find that the court excluded any competent testimony 
offered by the defendant. Evidence as to what income 
the property, with the buildings and improvements on 
it, produced was excluded, and it is insisted that the in- 
come of property is a proper element to be considered 
in determining the market value of such property. That 
may be true in many cases, but in this case the income 
from the property to be vabied w^as fixed by the lease, 
and the evidence offered and excluded related to rentals 
of the buildings and disbursements on account of the 
property. Whether the lessee could raise sufficient in- 
come, to enable him to keep his covenant and pay the 
stipulated rent was not material. He agreed to pay an 
annual rent of five per cent, on the cash value of the 
vacant ground, and the court was right in excluding evi- 
dence as to the value or cost of the buildings or the net 
income to the lessee, or whether it would be profitable 
to erect a modern building for the remainder of the 
term. We think the court erred in admitting evidence 
on the part of the complainants as to the rental value of 
other property in the vicinity, what such property was 
leased for and what had been paid for other leasehold 
interests. The question what other leasehold interests 
are wor+h or how much other property was leased for 
was not material. The case, however, being in equity 
and the hearing before the court, it will be presumed 
that in a final consideration of the case the incompetent 
evidence was not considered unless the decree appears 
to have been based upon or affected by it, and we think 
that the legitimate evidence justified the decree." 

A¥e now present to you our answer to the contentions 



Ill 

of Mr. Criily in his statement furnished you, and also 
such other facts as we deem pertinent. 

The contention is, made by Mr. Criily that two things 
should be considered by the appraisers in arriving at a 
value in this year 1905 of the said fee. These are, first, 
Judge Tuley's decision in the National Safe Deposit 
Company's case against the Board of Education; and 
second, the sixth clause in the supplemental leases made 
in 1888 with the various tenants of the Board of Edu- 
cation. Mr. Criily claims that the leases made in Block 
142 and that to the National Safe Deposit Company were 
similar. If it were necessary, a reading of the two dif- 
ferent sets of leases would disclose that they are not 
the same, nor did Judge Tuley in the National Safe 
Deposit Company's case make a decision on any of the 
conditions which existed in any of tlie leases in Block 
142. He gave his decision based on reasons which ap- 
pealed to him, quoting from the document before him 
in that case alone, but both the force of the Tuley de- 
cision and any claims of benefits coming to the lessee or 
lessor from the sixth clause above mentioned was entire- 
ly destroyed and refuted by the decision of our Supreme 
Court in the Springer-Borden case above quoted. In 
that decision, the true test of the value of the fee is laid 
down as being ''The cash value of the naked lot with a 
clear title in fee simple," and Mr. Criily concedes this 
standard, by admitting that the value to be ascertained 
is "the true cash value, not taking into consideration the 
improvements thereon. ' ' 

If the above position is correct, it is then a compara- 
tively simple matter to arrive at a fair value of the 
land. In arriving at such value it seems, that the best 
test is the numerous sales of property which have oc- 



112 

curred in the last ten years, together with the numerous 
ninety-nine year leases made in the same time of similar 
property to this in Block 142, wherein both the lessor 
and lessee have agreed upon a fixed sum as the actual 
cash value of the land leased. 

Accompanying this statement will be a sale map 
marked Exhibit '^A" showing the values occurring at 
different points around and close to Block 142 with a 
number attached to each value so placed. On a separate 
sheet, marked Exhibit " B ", a corresponding number will 
give a true description of each property; date of the 
transaction: the parties involved, the total considera- 
tion; and the square foot value. 

If the above view is correct, then it does not make 
any difference whether the term be a short one or a 
long one, as is contended for by Mr. Crilly. Mr. Crilly 
in one part of his statement says that new buildings 
give increased value. In this, he is right. In the last 
ten years the following elements have increased values, 
particularly in down-town property: 

1. The city has largely increased in population. Any- 
one who reflects knows it is people who make values. 
If you were to take away the people from Chicago, there 
would be very little value to the land here. It is true, 
especially in a business sense, that the greater the num- 
ber of people who congregate at, or pass, a certain lo- 
cality, the greater are the values attaching to that point. 

2. We have here in Chicago the ability to bring into 
the limited space called '^ Inside the Union Loop" com- 
prehending thirty-seven blocks, more people a day and 
to bring them out again at night, th an any other like area 
in any other city in the world. And again, the values of 
real estate in the Union Loop district can be made as 



113 

high as the real estate values of London, Paris, or New 
York, and are rapidly approaching the same, and still 
pay handsomely on such value. 

3. The sky-scraper, so-called, has made it possible for 
down-town property to earn two and three times the 
amount of rent on the same area of ground. One illus- 
tration will suffice. The First National Bank people are 
today getting rent from eighteen stories where before 
they got rent from but five. 

One condition, \shich should be mutually admitted, be- 
cause of its known existence by all well informed per- 
sons, is that for high class property on loans, the rate is 
four per cent. On high class property for 99 year leases 
it is four per cent. And in placing values on all down- 
town property, the income on the land is calculated on a 
four per cent, basis. In making statements in figures to 
your honorable body, the square foot values on the 
rents now being paid on revaluation school leases will 
be capitalized on four per cent, and not on the six per 
cent, rate, which of course will make no difference in the 
exact amount of rental received each year. That is to 
say, on Mr. Crilly's lease in 1895 the value placed by 
the appraisers was $540,000 at six per cent., which makes 
$32,400 a year rent, and on a sale to a capitalist, it would 
sell for just fifty per cent, more, or on a four per cent, 
basis, or for $810,000. On a four per cent, basis, it would 
produce just the same rental, to-wit, $32,400. The rea- 
son for elaborating on this that all comparisons to be 
shown to your honorable body on 99-year leases, made 
by private i)arties, are computed on a four per cent, 
basis, so that Mr. Crilly's lease, on his six per cent, 
clause making a valuation of $43.26 a square foot, means 
that under a four per cent, valuation the square foot 



114 

value would be $64.89, and in this computation, the four 
per cent, basis making the square foot valuation of $64.89 
will be used, 

Mr. Crilly says a great deal about litigation; about 
the effect of future panics; of the First National Bank 
property drawing tenants away from his building; and 
of the failure of some buildings down town; but because 
of the facts hereinbefore stated, it is not considered 
these items merit any extended reply. The Board of 
Education cannot compel any lessee to manage his build- 
ing in any particular way. Each lessee necessarily must 
be left to conduct his business as his best judgment dic- 
tates, and it is no concern of the board as to whether its 
lessees are or are not able managers. That is one of 
the questions affecting the leasehold value and has abso- 
lutely nothing to do with the present cash market value 
of this land, which is the sole problem for your ascer- 
tainment as appraisers,. 

Mr. Crilly does not name any of the profitable lease- 
holds like the Marquette and others which may be cited. 
He states that there is bound to be a slump in values 
in ten years, but the average man does not think Chi- 
cago is going to stop growing, and certainly your honor- 
able body cannot speculate on future depreciations 
which would be merely conjectural and can have no 
place in your deliberations. His statement that the pres- 
ent real estate market is artificial is refuted by the pur- 
chases of real estate in the central portion of this city 
to the extent of millions of dollars by such successful 
men as Otto Young, Marshall Field, Owen Aldis, the 
Mandel Brothers, Cyrus H. McCormick and others. His 
statement that this lot is Hot large enough upon which 
to construct a modern building is refuted by the bbserva- 



115 

tion of every man who has examined the new improve- 
ments lately constrncted or now being erected upon al- 
most every block within the loop. 

Mr. Crilly's various contentions that your honorable 
board dare not put on any higher values for this fee 
than were placed thereon by the Board in its last ap- 
praisement, and particularly that you dare not place 
values as high as those on the National Safe Deposit 
Company and the Tribune corners, are ridiculous, be- 
cause it matters not what property sold for ten years 
ago or eighty years ago or am^ number of year ago, or 
what it may sell for one hundred years hence. The test 
is, what is the present cash market value of the land in 
question? And it certainly will be conceded by any un- 
biased person that down town property is much more 
valuable today than it was five years ago or even three 
years ago. This identical property, probably at one 
time, sold for the usual price of $1.25 per acre, but such 
sale and such value have no force in ascertaining the 
present value under existing conditions. With all the 
objections, Mr. Crilly has raised to this lease, he is care- 
ful to state that he would not like to be compelled to sur- 
render the sam.e. He admits as do some of the other 
lessees in their statements that the old buildings on these 
revaluation leases are of trivial value, and that the best 
of the buildings cannot possibly stand to the year 1910 
with any profit to the respective lessees. 

In addition to the sales and 99-year leases, a list 
marked Exhibit ,''C" will be furnished to your honorable 
body of ten-year leases made on property with old hulks 
of buildings, such as this is, where, on such leases, the 
value of the land is 90 to 95 per cent, of the total value 
of the premises. Such tenants take the risk of moving 



116 

out their fixtures on a ten-year lease, which are more 
valuable to them than are these old buildings to the pres- 
ent tenants of tlie School Board. 

As showing that the values placed b^ the last ap- 
praisement were not too high and are not a burden on 
the tenants, we submit a list marked Exhibit "D" of 
the sales of a number of these leaseholds in block 142, 
each of which were sold for a large bonus or profit. 

From an analysis' of all transactions bearing on values 
down town, the minimum value would seem to be on 
this corner $100 per square foot, or a total of One 
Million Two Hundred Forty-eight Thousand Dollars 
($1,248,000), which at four per cent, would make a ren- 
tal of $49,920 a year, or if jDlaced on the six per cent, 
rate, the value would be $66.66 a square foot, or a total 
valuation of $832,000, which at the six per cent, would 
produce $49,920l 

All of which is respectfully submitted on behalf of 
the Board of Education of the City of Chicago. 

James Maker and 
Angus Eoy Shannon, 

Attorneys. 

DANIEL F. CRILLY. 

Statement in Rebuttal by Cassoday & Butler and 
Oliver D, Crilly. 

To the Honorable Board of Appraisers of School Prop- 
erty of the City of Chicago : 

Gentlemen : — 

Clause Sixth of Mr. Crilly 's amended lease either 
means something or it means nothing. This is what it 
says : 



117 

''Sixth. That, notwithstanding* anything in said lease 
contained, the appraiser shall he at liberty in forming 
their judgment of the value of the land, without includ- 
ing the value of the improvements thereon, to take into 
consideration, if any so far as they deem it pertinent to 
do so, the improvements on such land, and the character^ 
condition, value, cost, rental, expenses and other partic- 
ulars thereof, and any other facts or information, from 
whatever source, hearing upon the question of the actual 
value of said land; and it shall be the duty of the lessee 
to furnish the appraisers promptly, on request, a state- 
ment showing the rental receipts and disbursements on 
account of said improvements for five years, as near as 
may be, next preceding the time of the appraisement." 

We are firmly of the opinion that Clause Sixth means 
something, and that the something which it means is 
just exactly what it says. The original lease between 
the School Board and Mr. Crilly was burdensome, op- 
pressive and inequitable in the extreme, and was so rec- 
ognized by both of the parties to it and by all other 
lessees of school property who held under leases con- 
taining similar provisions. The drastic requirements of 
the lease of 1880 led to an enormous amount of litiga- 
tion, which was unprofitable and distasteful alike to both 
parties to it. During the time of and for some years 
subsequent to the apjjraisal of 1895 the unfairness of 
this class of school leases so impressed itself upon all 
parties concerned that the School Board, reflecting the 
sentiment of the public at large, decided that it would be 
for the people's best interests to incorporate in these 
leases a few amendments tending to fairness. The ques- 
tion of just wiiat concessions should be madeto the lessees 
was thoroughly thrashed out by the School Board and its 



118 

able legal representatives, with the result that finally 
the School Board itself drafted the general form of 
amendment which was subsequently executed by most 
if not all of its lessees. We call the particular atten- 
tion of this Honorable Board to the fact that this amend- 
ment is the set form of the Board of Education. Mr. 
Crilly's original amendment, executed by the School 
Board and himself, appears to be a mimeograph copy. 
We have examined am.endments to other school leases 
of about the same date and find that they are of the 
same form. Clause Sixth of tlie amendment therefore 
appears to be something which was inserted into and 
made a part of the School Board's agreement with Mr. 
Crilly by the School Board itself. The language is the 
language of the School Board and not that of Mr. Crilly. 
Under a rule of law relating to the interpretation of 
written instruments, if there is any doubt as to the 
meaning of the language contained in the clause to be 
interpreted, that doubt should be resolved against the 
party whose blank form was used and in favor of the 
other party to the contract. As the language of the 
clause seems to be perfectly clear and unmistakable, tlie 
only possible question that can be raised concerning it 
is not what it means but whether it means anything at 
all. And the School Board, itself having made Clause 
Sixth a part of its lease with Mr. Crilly, now comes be- 
fore the Board of Appraisers and through its counsel 
asks this Honorable Board to consider Clause Sixth as 
void, without meaning and of no force and effect what- 
soever. The following brief statement will show how 
the School Board succeeds in turning this mental somer- 
sault. The answer presented by the Board of Educa- 
tion to the statement heretofore filed on behalf of Mr. 
Crilly covers less than ten typewritten pages, more than 



119 

half of wMcli are devoted to a discussion of a recent hold- 
ing of the Supreme Court of this state in the case of 
Springer v. Borden, in which is announced the rule of 
law which should govern in determining the value of a 
certain piece of property under tlie terms of a certain 
lease. The rule of law announced is no doubt correct as 
applicable to the facts in that case. The same rule of 
law has been held in this state ever since the state courts 
were established and was in force and effect when the 
appraisal of 1885 was made. // ivas to avoid this very 
ride of laiu that Clause Sixth ivas incorporated into and 
made a part of Mr. Grilly's contract with the Board of 
Education. The certain lease under consideration by 
the court in Springer v. Borden did not contain, nor did 
it purport to contain, any clause in any way similar to 
Clause Sixth. There was nothing contained in the Sprin- 
ger-Borden lease which in any way extended or limited 
the elements that might be taken into consideration in 
determining the value of the demised premises. The 
ruling in the cas.e of Springer v. Borden might be held 
applicable in the matter before you for determination 
if Clause Sixth were entirely eliminated from Mr. Cril- 
ly's lease. But Clause Sixth is a part of Mr. Crilly's 
contract, inserted by the Board of Education itself, and 
must be construed to mean that this Honorable Board, 
in arriving at the value of the Crilly corner, shall take 
into consideration, in addition to things which the court 
considered in the Springer-Borden case, each and all of 
the elements of value enumerated in the clause. And 
there can be no doubt in the mind of any man who gives 
the matter fair consideration that it was for the very 
purpose of bringing the matters and things mentioned 
in Clause Sixth into the consideration of the appraisers 



120 

that that clause was made a part of the contract be- 
tween the School Board and Mr. Crilly. It was unques- 
tionably believed by the School Board itself that if the 
value of this corner were determined solely in accord- 
ance with the hard and fast rules of law an injustice 
might be done at some time or other to either or both 
of the parties to the lease. It is true beyond any doubt 
whatsoever that at the time the amendment of 1888 was 
made it was fully intended by the parties that the Board 
of Appraisers should take into consideration in valuing 
this property the present lease upon it, together with 
all its beneflts and advantages as well as all its hazards 
and limitations. It would be wholly unjust, unfair and 
unreasonable for the Board of Education to impose the 
harsh terms of this lease upon Mr. Crilly and compel 
him alone to suffer from them. The Board of Education 
cannot fairly exempt itself from the penalties that the 
provisions of this lease impose. If the provisions of 
the lease prove to be detrimental to the value of the 
property the Board of Education has no one but itself 
to blame. Clause Sixth means either that these elements 
of value should be taken into consideration by this Hon- 
orable Board or the clause stands absolutely meaning- 
less, a mockery to those who endeavored to make it a 
part of this contract and a jargon of words which work 
a fraud and an injustice upon the person for whose 
benefit they were most clearlj^ intended. 

If "facts or information from whatever source bear- 
ing upon the question of the actual value of said land" 
are considered by this Board in its deliberations, as 
the amendment most undoubtedly provides shall be done, 
we submit that there is not a single line contained in 
our statement heretofore filed herein which is irrelevant 



121 

or immaterial to your deliberations. The facts set forth 
in the statement on file as certainly depreciate the value 
of the title of the fee as they depreciate the value of the 
building and the lease. It is absurd to believe that a 
man would pay the same price for this corner with the 
present building and lease on it that he would pay for 
it if it were improved with a building costing a million 
dollars erected under a straight 99-year lease at the 
Tribune or National Safety Deposit Company rate of 
rental. If it is clear that the facts set forth depreciate 
the value of the fee in the mind of a prospective pur- 
chaser, there can be no question that they depreciate 
the actual cash value of the fee for all purposes. Coun- 
sel for the School Board objects and says that the pos- 
sibility of the lessee having to pay taxes upon the land 
has nothing to do with its value. We apprehend that if 
taxes in the City of Chicago were 10 per cent, instead 
of approximately 1 per cent, a considerable ditference 
would appear in the value of every piece of real estate 
within the city limits, and in just the same proportion 
the value of property would be atfected by an increase 
or decrease in taxes of even as little as 1 per cent. Like- 
wise, counsel for the School Board objects that the com- 
petition of buildings has no etfect on the value of real 
estate. In this connection we beg to call your attention 
to an article from the Economist of February 4, 1905, 
concerning the erection of office buildings in Boston. 
The Economist says : 

"Complaint is already made in Boston that the con- 
struction of big office building has been overdone. The 
dividends of some of the older proprietary companies 
have been reduced and the stocks of many of the newer 
concerns are below par. Accordingly plans to erect ten 
or a dozen additional buildings are held in abeyance." 



122 

The income the lessee derives from the building is also 
objected to in the answer filed by the School Board as 
not being a proper matter for your consideration. We 
lay little stress on the matter of income, but furnish 
it, as we construe Clause Sixth of the amendment to 
require us to do. Whether the income a man derives 
from his property has anything to do with its value we 
are only too glad to leave to the members of this board 
to say. 

With reference to Exhibits A and B presented with 
the statement of the Board of Education we can only 
say that the attempt to establish the value of any par- 
ticular piece of downtown property in the City of Chi- 
cago by comparing it with the recent sale or lease value 
placed upon other pieces of downtown property must 
utterly fail. We have only to refer to the Board of Ed- 
ucation's Exhibit B, which purports to give the square 
foot value of twenty-five different pieces of downtown 
property, to show how impossible it will be for you to 
value the Crilly corner by comparing it with the pieces 
of property set forth in Exhibit B. The square foot 
values shown by this exhibit are estimated on a four 
per cent, basis and run from $61 to $264.93. 

Is this board able to deduct from these widely varying 
figures any logical conclusion as to the value of the 
property leased Mr. Crilly? 

Insufficiency of Comparative Values. 

Counsel for the board in his statement on page 5 quotes 
with approval from the opinion of the Supreme Court 
of Illinois in the case of Springer v. Borden the following 
language : 



123 

' ' The question what other leasehold interests are worth 
or how much other property was leased for, was not ma- 
terial. ' ' 

The elements and factors that enter into the value of a 
piece of downtown property are exceedingly numerous 
and seem to multiply as the value of the property in- 
creases. The more valuable property becomes the more 
sensitive it is to the different influences of light, loca- 
tion, transportation, alleys, foundations, competition, 
leases, tenants, rate of interest, taxes, insurance, repairs 
and many other items. For instance, property on State 
street is universally acknowledged to be double in value 
that on Dearborn street, only a few feet away. Property 
on Madison street has always been considered more val- 
uable than property on Monroe street. The corner of 
State and Madison streets has always been considered 
more valuable than the corner of State and Adams 
streets. The east side of State street is considered far 
more valuable than the west side. So it is apparent that 
as a general proposition comparative figures afford no 
definite basis on which to arrive at the value of a given 
piece of property. 

One Pair Comparison of Values. 

We took some pains in our statement to compare the 
First National Bank and Tribune corners with the Crilly 
corner. We believe that we were justified in doing this 
for the reason that these three corners are more nearly 
alike than almost any three corners in the City of Chi- 
cago. We desire now to present a comparison between 
the Crilly corner and the Tribune corner, each 120 feet 
deep, running from Dearborn street to the same alley. 



124 

The Tribune corner fronts 144 feet on Dearborn street. 
The Crilly corner fronts 104 feet on Dearborn street, 
and to this we add for present purposes the 40 feet im- 
mediately adjoining on the north known as the Wilson 
property. We thus have two exactly equal areas, each 
fronting 144 feet on Dearborn street, and being in the 
same block, their inside corners being only 111 feet apart. 
The Tribune under its long term lease is to pay from 
1905 to 1915 an annual rental of $47,376, the annual 
square foot rental being $2.74. This makes the square 
foot value on a six per cent, basis $45.69, and on a four 
per cent, basis $68.54. The Wilson 40 feet is also under 
a long term lease at a fixed annual rental from 1905 of 
$8,379. In order to make the 144 feet at Dearborn and 
Monroe produce for the Board of Education the same 
amount as the Tribune comer produes, Mr. Crilly would 
be obliged to pay an annual rental of $38,997, the square 
foot rental being $3.12^. The square foot value on this 
basis at six per cent, would be $52.08, and at four per 
cent, would be $78.12, which is greatly in excess of the 
value placed upon the Tribune corner. There are two 
reasons, eacb entirely good and sufficient in itself, why 
the valuation placed upon the Crilly corner should not 
equal that placed upon the Tribune corner. First, the 
Tribune property is on Madison street, and Madison 
street property has for many years been valued higher 
than Monroe street property. Second, the Tribune is in 
the enjoyment of a long term lease from which the re- 
valuation clause is eliminated, in consequence of which 
the corner is improved with a modem 17 story building 
of sufficient size to make it a paying investment. The 
Board of Education cannot in fairness make it impossi- 
ble for Mr. Crilly to erect on these premises a modern 



125 

building and at the same time demand from him a rental 
which only a modern building can produce. 

Analysis of Exhibit B of the Board's Answer. 

Exhibit B of the Board of Education contains memo- 
randa of only twenty-five transactions in downtown 
property extending back to the year 1892. This Honor- 
able Board will of course make note of the fact that only 
such transactions are included in Exhibit B as show 
exceedingly high valuations. 

We beg first to call your attention to the fact that 
twelve of the transactions mentioned, numbered 42, 43, 
44, 47, 48, 49, 50, 51, 52, 53, 54 and 55, involve State street 
property. On just what basis Dearborn street property 
can be compared with State street property the attorney 
for the Board of Education does not undertake to set 
forth. We believe this Honorable Board will be of opin- 
ion that State street values form no basis whatsoever for 
arriving at the values of Dearborn street property. 

The figures presented by the School Board in Exhibit 
B as to the following pieces of State street property need 
explanation in the f ollowiiig instances : 

43. The square foot ground value is given as $125. 
This value includes the building. The ground alone 
is valued at $300,000. The annual rental is $12,000. 
The property, being 25x120, contains 3,000 square feet. 
The square foot value, therefore, is $100 instead of $125. 

44. This piece of property is the third lot from the 
northeast corner of State and Monroe streets. The 
fee to the 20 feet on the corner is owned by Eugene Pike. 
The second 20 feet were leased by him from the Board 
of Education in February, 1902, to 1985, without revalu- 



126 

ation, the rental from 1905 to 1915 being $7,560, which 
makes the square foot value less than $102. The Pike 
lease undoubtedly covers a more valuable piece of prop- 
erty than that described at No. 44. 

47. The Economist is authority for the statement 
that the average rental for the entire term is $12,372, 
which gives the property a square foot valuation of 
$112.60 instead of $123.70. 

48. This is the southwest corner of State and Adams 
streets. The dimensions are 22^x801 feet, giving a 
square foot area of 1811^. The rental is $17,000, which 
makes a square foot value of $234 instead of $264.93. 

51. This is south part of the Palmer House. 

Aside from the State street property included in Ex- 
hibit B the transactions included therein are explained 
below under numbers the same as those contained in 
Exhibit B: 

1. This is a small Madison street corner, under a 
straight 99-year lease, and was made to the Illinois Life 
Insurance Company which was already the owner of the 
fee to the alley property on the north. The plans of 
the insurance company contemplated the erection of a 
building running from the alley to the corner which 
would be of sufficient size to make an adequate return 
upon its investment. The frontage of the fee owned 
by the insurance company was only 76 feet, which the 
company for obvious reasons felt was too small a piece 
on which to build. The present holding of the insurance 
company on this comer is 177|xl61 feet. 

3. It is a well known fact that the Hartford Build- 
ing has never paid its owners anything on their invest- 
ment. Additional property adjoining on the west has 



127 

recently been acquired only fifty feet from the corner 
based on a square foot value of $66.66, with the hope 
that by the erection of an addition the building could 
be made large enough to pay. 

6. This transaction represents one of a number by 
Victor F. Lawson, the first of which was a lease cover- 
ing 175 to 181 Madison street for 99 years without re- 
valuation, obtained by him from the Board of Educa- 
tion in 1895, on a valuation of $25 a square foot, the 
dimensions being 80x180. In order for Mr. Lawson to 
have all the room necessary to conduct his business he 
was in a position where he had to deal with the owners 
of this property and another piece adjoining it on the 
north. The price he paid for the corner is undoubtedly 
excessive for the reasons stated. The property adjoin- 
ing on the north was. purchased by Mr. Lawson in 1904 
on a square foot valuation of $45. 

8. This transaction was one of a series by which 
Charles Netcher, proprietor of the Boston Store, sought 
to obtain additional space to meet the requirements of 
a rapidly growing business. Mr. Netcher was blocked on 
the north by Hillman and Carson, Pirie, Scott & Co., 
rivals in business, and the only direction in which he 
could extend his, holdings was to the west. This prop- 
erty belongs to the City of Chicago and was under a 
99-year lease subject to revaluation. The appraisers 
who valued this property on November 28, 1902, stated 
in their report that if a straight 99-year lease were 
given to Mr. Netcher twenty per cent, should be added 
to the value which they placed on the property under 
the terms of the lease as it then stood. Mr. Netcher has 
also acquired the property adjoining on the west, 80x160 
feet, belonging to the Board of Education, at an annual 



128 

rental of $25,200, which makes, a square foot valuation 
of $49.21. This gave Mr, Netcher holdings from State 
.street up to the Dearborn street frontage which it be- 
came necessary for him to obtain. The transaction shown 
at No. 18 is the purchase by Netcher of the fee title to 
the northeast corner of Madison and Dearborn streets, 
63x80 feet, on a valuation of $110 a square foot, which 
is generally conceded to be far in excess of its value to 
any one except the owner of the property to the eas.t of 
it. Counsel for the Board neglected to include in Ex- 
hibit B a statement of the purchase by Mr. Netcher of 
the property at 119 Dearborn street, which is the corner 
of the alley between Washington and Madison streets. 
'This property was purchased by him in December, 1898, 
on a square foot valuation of $52, and is only 26| feet 
wide by 80 feet in length. No. 53 is also a State street 
transaction by Mr. Netcher in which he had to deal with 
the owner at the owner's price. 

All of thes.e transactions concern property between 
State and Dearborn streets, and between Madison street 
and the alley to the north, of all of which the Netcher 
estate is now owner or lessee. 

12. This is a small corner piece occupied by the Real 
Estate Board Building. The value placed upon this 
property includes the building, which is a good one and 
well rented. In this connection we call the attention of 
the Board to the Iroquois Theater property which imme- 
diately surrounds the corner piece on all sides. This 
was leased in May, 1902, for 99 years without revalua- 
tion, at an average rental of $23,939, which gives that 
property a square foot value of only $27.70. 

16. This is the Bedford Building. A small corner. 



129 

We again quote from the Economist. Its issue of April 
2, 1904, says that this building was taken in exchange 
for other property, and that the exchange value placed 
upon the ground and building was $425,000. The build- 
ing was. valued at $125,000, leaving the ground at $300,- 
000, which would give a square foot value of $82 instead 
of $110.95, as Exhibit B sets forth. 

25. Counsel for the Board has been very careful to 
omit from Exhibit B information concerning the entire 
transaction that Mr. Eector had concerning the lease of 
the corner on which his new building stands. Only 43^ 
feet on the corner are included in the Exhibit. This cor- 
ner altogether is only 91x90^ feet, and the fee belongs 
to three different owners. The 24 feet inside the corner 
Mr. Eector leased on a square foot value of $70, and the 
next 24 feet he rented on a square foot value of $58.40. 
His total rent is $32,000, which makes an average square 
foot value on which he pays four per cent., $87.80. 

56. This is the Morrison Hotel property, which until 
very recently was in the possession of J. K. Sebree, who 
owned this and other hotels in the down town district. 
Competitors, in business negotiated for the property and 
outbid Mr. Sebree, whose lease had only about two years, 
to run. 

5:8. This is a lease to a gentleman of wealth inter- 
ested heavily in one of the largest department stores, 
in the city who is reputed to have been engaged for 
the past two or three years in buying up fee titles and 
leaseholds in every block on the so-called retail streets 
in order to prevent the, extension of real estate holdings 
by rivals in business. The fictitious, values of down town 
property are very largely due to the extensive buying in 



130 

which this gentleman has been engaged for the past few 
years. 

59. This is the Fort Dearborn Building. Two of its 
former owners are reputed to have lost heavily in their 
venture. One of them was in the hands of a receiver 
for many years. The owner of the building has recently 
acquired an additional 30 feet on Clark street, 90 feet 
deep, and has erected an addition thereon, expecting 
with the enlarged building to be able to make this in- 
vestment pay. The square foot value of the 30x90 feet 
is placed at $69.16. 

We call to your attention the -following recent trans- 
actions in real property mostly on Dearborn and Mon- 
roe streets: 

Square Foot 
Size. Value. 

1. Couch Estate to Northwestern 

University — Sale, March, 
1901, old Tremont Hotel 
Property 180x160 ft. $15.60 

2. Lyman, Harris & Lowell, 

Trustees, to Davis, Powers 
et al. — Lease, May, 1902, 
Iroquois. Theatre Property, 

99 years Surrounding 

Corner. $27.70 

3. Benj. Manierre to Dickey Es- 

tate—Sale, May, 1901, 76-78 

Dearborn Street 40x80 $39.00 

4. Dickey Estate to Benj. Man- 

ierre— Sale, May, 1901, 86- 

88 Dearborn Street 38|x80 $40.40 

5. David R. Lewis to Archbishop 

Catholic Church — Sale, No- 
vember, 1904, 93 to 97 Dear- 
born St 58x80 $53.00 



131 

Square Foot 
Size. Value. 

6. Stearns Estate to the Fair — 

Lease, May, 1895, N. E. cor. 
Dearborn and Adams Sts. 
(part of the Fair) 190x166. a2 $55.40 

7. Mrs. L. DeK. Bowen to Bryan 

Lathrop et al., trustees, — 
Sale, January, 1900, N. E. 
cor. Monroe and Wabash. . 172x76 $35.7a 

8. P. C. Brooks to National Safe 

Deposit Co., — Sale, Decem- 
ber, 1901, Grround under 
Montauk Building 89x70 $30.00 

9. Nathaniel Thayer to National 

Safe Deposit Co. — Sale, De- 
cember, 1901, Property just 
West of old Montauk Bldg. 
formerly occupied by Brad- 

ner Smith & Company 22 . 67x194 . 8 

89x129 $32.50 

10. John Borden to Warren 

Springer — Lease, 1902, 140 

to 146 Monroe Street 90x188 $26.00 

11. R. H. Crozer to Bradner, 

Smith & Co. — Sale, April, 

1901, 184-186 Monroe St. . 45x189 $16.00 

12. Alfred C. Bryan to Northern 

Trust Company-Sale, June, 
■ 1904, N. W. cor. La Salle & 

Monroe 73^x190 $60.85 

13. Mark Skinner to Jacob L. 

Kessner — Lease, 99 years, 
April, 1905, N. E. cor. Wa- 
bash and Madison Streets. 101x162^ $42.71 

The above are only a few of many recent transactions 
which we might cite if time and space permitted and if 
we did not feel that we have already imposed severely 



132 

upon the patience of this Honorable Board of Apprais- 
ers. 

Eespectfully submitted. 

Cassoday & Butler and 
Oliver D. Ceilly, 

Attorneys for D. F. Crilly. 

Testimony Taken and Proceedings had on the 4th Day 
of May, A. D. 1905, Before the Board op Appraise- 
ment, Consisting of Messrs. Watermann, MacLaren 
and Kerfoot at Eoom No. 608 First National Bank 
Building, in the City of Chicago, in Reference to 
THE Matter of the Leasehold of Daniel F. Crilly, 
Esq., of the Property Known as the Northeast Cor- 
ner OF Monroe and Dearborn Streets, in the Said 
City of Chicago. 



Appearances : 

Appearing on behalf of Mr. Crilly, Messrs. Cassoday 
& Butler. 

Appearing on behalf of the Board of Education, Mr. 
James Maher. 



Mr. MacLaren: Well, gentlemen, I take it that the 
most expeditious way to proceed with this matter is to 
get to business at once. I understand that Mr. Butler 
has some witnesses here, and I think we had better pro- 
ceed to hear their evidence. 

Mr. Butler: Well, Mr. MacLaren, we have Mr. 
Knight and Mr. Snow here, in accordance with the under- 
standing that we had the first time we were here, some 
weeks ago, which was to the effect that we might intro- 



133 

duce testimony, but we won't botlier you with but two 
witnesses, and we hope that we won't bother you with 
them. 

Mr. MacLaeen: It won't bother us in the slightest, 
we are here for that purpose, and I think that would be 
the most intelligent way of getting through with it. 

Mr. Butler: The property under consideration is 
known as Lots 23, 24, 25, 26 and 27, in Block 142, School 
Section, situated on the northeast corner of Dearborn 
and Monroe streets, fronting 104 feet on Dearborn street 
and 120 feet on Monroe street, to an alley. 

Mr. Kerpoot : How wide is the alley I 

Mr. Butler : Fifteen feet wide. 

John B. Knight, called as a witness on behalf of Mr. 
Crilly, testified as. follows : 

Direct Examination by Mr. Butler. . 

Q. State your name, Mr. Knight. A. John B. 
Knight. 

Q. Your business ? A. Eeal estate. 

Q. Now, I wish you would state, Mr. Knight, inas- 
much as we desire to take this up as informally as possi- 
ble, I wish you would state what your experience is in the 
real estate business in general, s,o that we may have your 
qualifications as an expert on real estate valuations, or 
know what they are, as to real estate values in the down 
town district of the City of Chicago ? A. I have been 
doing business here since 1871. I have had a very active 
career in real estate, and have had charge of consider- 
able property; made sales of it, ninety-nine-year leas.es 
of it, and handled it for owners, and I am still doing it. 



134 

Q. Have you loaned money on it? A. Yes, sir. 

Q. Are you interested in loans on property at the 
present time in this downtown district! A. To some 
extent, but not very largely. 

Q. Well, you have had all kinds of dealings in this 
kind of property, and have clients who are dealing in 
this kind of property? A. Yes, I have clients who are 
now dealing in this clas.s of property. 

Q. You are familiar with the premises occupied by 
Mr. Crilly? A. I am. 

Q. Wliat, in your opinion, are those premises worth? 
A. Seventy-five dollars a square foot; that would be, 
as I reckon it, $9,000 a front foot on Dearborn street, 
which would make it about — let's see. Yes, $9,000 a 
front foot on Dearborn street. 

Q. On what basis is that figure, Mr. Knight? On 
what percentage? A. Well, that is the. value of it to- 
day, and the rates today are about 4 per cent. 

Mr. MacLaren : I do not think that is proper evidence 
to bring in here. What we want to get at is, the value 
of the property, and that is where we stop. 

The Witness: The fair cash value of the property, 
in my judgment, is $9,000 a front foot on Dearborn 
street. 

Mr. Butler: Q. In arriving at that value, you take 
into consideration the rate, the interest rate, as 4 per 
cent? A. I take into consideration all the conditions 
that exist today that give a foundation for the value of 
that real estate. 

Q. Does that include the interest rate at four per 
cent? A. Yes, that always enters into valuations. 



135 

Q. What is the value of that property at the rate of 6 
per cent.? A. Well, the rate of 6 per cent, would not 
change the value of the property; it would change the 
condition of the landlord's estate and the leaseholder's 
interest in it. 

Q. Well, on that basis what is it worth? 

Mr. MAcLARE,]sr : I think, Mr. Butler, you are getting 
outside of what is. necessary to bring before us. That is 
a question for the Board of Education to settle, and not 
for us as Appraisers. 

Mr. Keefoot : In other words, we are not valuing the 
leasehold, we are not asked what the rental value of 
that property is. 

Mr. Butler: There are certain things that are taken 
into consideration in arriving at the value of this prop- 
erty, and one of them is the interest rate, as I under- 
stand Mr. Knight. 

The Witness : That, of course, atf ects the values., the 
interest rate always does, but more than that it affects 
the interest of the landlord, or the landlord's estate, and 
also the interest of the lessee. 

Q. Well, on the basis of 6 per cent, as income on this 
property? A. Do you mean net income from the ground? 

Q. Yes, net income from the ground, what is its value? 
A. The ground value would not be changed at all, but 
the landlord's, estate in the land would be increased one- 
third, and that would militate, of course, against the 
interest of the lessee to that extent. 

Q. Have you made any computation as to the value 
of this property, on a 6 per cent, basis? A. It would 
be just two-thirds of what I have placed upon it. 



136 

Q. Two-thirds of $9,000 a front foot? A. Yes, sir. 

Q. And two-thirds of $75 a square foot I A. Yes, sir. 

Mr. Butler: I presume that it is understood that the 
lease between Mr. Crilly and the School Board is in evi- 
dence here ; if not, we offer it now. 

Mr. MacLaeen : All right. 

Mr. BuTLEE : Q. Mr. Knight, under the terms of this 
lease between Mr. Crilly and the Board of Education, it 
appears that one of the clauses calls for a revaluation of 
this property every ten years during the existence of the 
lease. What, in your opinion, is the effect of such a 
cause upon the interest of the lessor? 

A. I think it is unfavorable. 

Mr. Maher: Of course I don't take it that objections 
are necessary on behalf of the Board in these matters at 
all, but that it is the fact that the Board of Appraisers 
can get any information in any way they want and then 
arrive at their own conclusion as to the value of the 
land; but I do take it that what the Board is to arrive 
at is the value of the land, and as to whether the land is 
to be revalued every ten years or every fifteen years., or 
whether it is covered with a lease at all or not, my under- 
standing is that that makes no difference. 

Mr. Butler: That simply calls up the question as to 
whether or not clause 6 in the amendment has any mean- 
ing. If it has any meaning, that is a proper considera- 
tion ; if it has no meaning, it is not a proper considera- 
tion. 

Q. Let me ask you first, Mr. Knight, this, question: 
You say that at a 6 per cent, basis you value this ground 
at $624,000? A. No, I did not say that. I don't mean 



137 

that I would value the land at that, but that will affect 
the interest of the lessee to the extent of one-third, and 
it would also, I think, affect unfavorably the interest of 
the landlord's estate. I think that any contract that has 
in it the element of doubt from time to time, and that 
brings up constantly his quesion of revaluation, is not 
as. favorable as otherwise it would be. No two Boards 
of men are going to look at the question alike. It is con- 
stantly threatening, threatening the interest of the land- 
lord's estate in the land, and I think it threatens very 
seriously the interest of the lessee. 

Q. That is, you say that a value on this ground, then, 
that the value on a 4 per cent, basis is $9,000 a front foot 
on Dearborn street, or $936,000 for the entire property? 
A. Yes, sir. 

Q. At 4 per cent, that would yield an annual rental 
of $37,4401 A. Yes, sir. 

Q. Is that, in your opinion, a fair rental for that 
property? A. I think so; yes, sir. 

Q. That is, under a straight, ninety-nine year lease 
without revaluations'? A. That would be my judgment ; 
yes, sir. 

Q. Well, under a lease containing this revaluation 
clause of which I have spoken, what, in your opinion, is 
the effect of that clause on the rental? A. I think it 
would be excessive for the reason that, under the re- 
appraisal, it makes it practically impossible for a ten- 
ant to improve the property to advantage. He cannot 
borrow money, and, if he were to use his own, the effect 
of it would simply be, under the reappraisement con- 
tract, to advance the interests of the lessor, as against 
his own interests. I think under a straight contract, that 



138 

a fair consideration for tiie land is 4 per cent, upon its 
present valuation, and that is the ruling rate of inter- 
est, and contracts of that kind are being made on that 
basis, and I think that the rent represented by that would 
be a fair return for it on a ninety-nine year lease on 
the property. 

Q. Have you made any calculation as to how much 
this clause in this particular lease would depreciate the 
rental that should be demanded by the landlord under 
this lease? A. It is a very difficult thing to arrive at. 
I should not want to attempt to determine a sum that 
would represent that, but the condition in itself is a very 
serious one. It would be a very serious element. It 
would amount, in my judgement, to a very substantial 
reduction in order to place the lessee in a position where 
he would be enabled to meet the results of such a condi- 
tion. 

There is a feature of that wdiich, it seems to me, is 
very important to be considered, and that is that the 
lessee, owning a building of that character upon a piece 
of land, with the revaluation clause constantly staring 
him in the face, it would be much to his advantage if he 
could lease to tenants for tive years or for a longer 
period, but under that condition he would not dare do 
it. If he gives a contract running beyond the period of 
revaluation, some Board having that matter under con- 
sideration, might take a view of it to the etfect that the 
land was very much higher than it was possible for him 
to pay rent upon. Therefore he would not dare to enter 
into contracts with his tenants. It would practically 
amount to a confiscation of his property, and it would be 
impossible for him to carry it on profitably. 

Of course, in my evidence before this Board, I am 



139' 

simply giving my impression of the general situation, as 
I understand it. 

Mr. McLaren : Have you an idea of the value of that 
land, if it was simply for sale without any lease or any- 
thing else? 

A. Yes, sir. 

Q. The bare, naked land is worth about $9,000 a foot"? 
A. Yes, sir; that is my judgment. 

Q. And $75 per square foot? A. Yes, sir. 

Q. That is your judgment about it? A. That is my 
testimony. 

Mr. Maher: That is, if it were in the market and free 
and clear from any encumbrance, the seller ready to 
sell, and the purchaser ready to buy, and no lease on it 
at all, vacant property? 

A. Yes, sir. 

Q. Mr. Knight, suppose there were a lease on there, 
a fifty-year lease calling for 6 per cent, of the land value, 
and the owner of the fee desired to sell it subject to that 
lease. Do you think it would be worth less than if there 
were a lease on it for 50 years for 4 per cent., under a 
straight lease? A. I do not think it would have any 
effect such as to change the value of the land, but there 
is a discrimination between the value of the land and the 
landlord's estate. 

Q. Suppose, Mr. Knight, that the owner of this ident- 
ical property had a good clear title in fee simple to it? 
A. Yes, sir. 

Q. And he had it leased, that is, the naked ground, 
leased for a term of fifty years straight? A. Yes, sir. 



140 

Q. And the lease provided for 6 per cent, on the actual 
land valne? A. Yes, sir. 

Q. Do you think it would sell in the market for less, 
under that lease, than if it were covered with a lease 
calling for 4 per cent.? A. No, sir; I think it would 
probably sell for more. 

Q. Do you think, Mr. Knight, or have you an opin- 
ion, as to whether or not property in this locality will 
depreciate or otherwise in the next ten years! A. Well, 
my opinion is that it will appreciate. 

Q. That it will gain in value? A. Yes, sir. 

Mr. Kerfoot: You sold the corner of Dearborn and 
Madison; what did you get for that a square foot? 

A. Well, the corner, we sold the corner piece, which 
is 63x80, for $625,000, including the building. That is 
pretty nearly $200 a square foot. 

Q. The building was not considered as worth any- 
thing? A. We considered it worth something, but the 
person buying it did not ; except for the purpose of ob- 
taining rents as long as the building stood. We got 
$485,000 for the piece adjoining it on the north. That 
piece was 76x80 and that was about $70 a square foot, 
I think, a little over $70. Taking the two pieces com- 
bined, I think, — well, I have forgotten now just exactly 
what it reached per square foot, but that, you see, is a 
corner only about — 

Mr. Keefoot: Well, you leased the inside piece on 
Clark north of Adams? ' 

A. Yes, but that transaction has not been closed, and 
it has not been made public, but I can say this, that we 
took advantage of the necessities of the fellow in that 



141 

case to the extent that we could, and we got a great 
deal more than we ever thought we would, 

Q. The corner of Monroe and Clark has just been 
leased! A. Monroe and Clark"? 

Q. Yes, do you know what that was leased fori A. 
I did know, but I have forgotten. 

Mr. MacLaeen : I can tell you, $87.50. 

Mr. Kebfoot: Do you know of any lease of the City 
of Chicago that has been made on a 4 per cent, basis'? 

A. Oh, yes, I remember one that I made that was on 
a 4 per cent, basis. 

Q. Hav-e you signed the lease yet? A. Well, we have 
signed it but it has not been delivered. I want to say 
this that I think that I could buy any piece of property, 
or that I could sell any piece of central property upon a 
valuation that any fair experts would place upon it, I 
think I could sell it today off-hand upon a guarantee of 
a 4 per cent, contract for 99 years, with the proper secur- 
ity behind it. 

Mr. MacLaeen : You would want the building and all 
those things as security? 

A. Oh, yes, you would want security. Of course, that 
sort of a contract must be secured, but I think that any 
piece of property in the City of Chicago in that central 
district tliat any man wants to sell at a price that any 
board of appraisers would place upon it, that I can sell 
on a 4 per cent, basis. 

Mr. Keefoot: Suppose you had this property leased 
at 6 per cent., don't you think j^ou could sell it for a 
great deal more? 

A. Oh, sure, but I don't think you could sell it to the 
full value of what that would represent. 



142 

Mr. Butlee: Could you sell such a leasehold at 6 
per cent, if it had a revaluation clause in it? 

A. No, sir. I think that a fair propostion, and one 
that with landlords is a decisive test, if a capitalist is 
willing to come into Chicago and buy any one of these 
prominent properties in the central district upon a guar- 
antee of a ninety-nine year contract or lease well se- 
cured, that he will buy it and pay for it and lease it 
upon the basis of 4 per cent. That illustrates the fact 
that these conditions are governed by the ruling rate of 
interest. 

Mr. Kerfoot : You did not answer my question about 
Monroe and Clark? 

A. I don't know, Mr. Kerfoot, I have forgotten it. 

Mr. MacLaren: I was told it was an average of 
$87.50. 

The Witness: I have forgotten the size of the lot. 

Mr. Butler: That is only 90 feet on Monroe street. 
That is a smaller corner than ours. 

Mr. Kerfoot: That makes yours all the more valu- 
able. 

Edgar M, Snow, called as a witness on behalf of Mr. 
Crilly, testified as follows: 

Direct Examination hy Mr. Butler. 

Mr. Butler: Will you ask him questions, or shall I? 

Mr. MacLaren: No, you ask him the question and 
bring out the facts. 

Mr. Butler : State your name ? 

A. Edgar M. Snow. 



14B 

Q. What is yo^ir business? A. Real estate, mort- 
gages and renting. 

Q. Kindly state your experience in the real estate 
business in the City of Chicago? A. I have been in 
the real estate business in the City of Chicago for up- 
wards of thirty-two years, dealing in down town prop- 
erty, making loans, and so forth, and have charge of 
property down town and throughout the city. 

Q. Are you interested as agent of any down town 
property ! A. Yes. 

Q. Have you loans at the present time on down town 
property! A. to the extent of several millions of dol- 
lars. 

Q. And you represent the lenders? A. We are cor- 
respondents of the lenders. 

Q. Is it on your valuation that these loans were 
placed? A. Yes, sir; our loans for non residents. 

Q. And you have bought and sold down town proper- 
ty in the last live years, have you? A. Yes, sir. 

Q. Well, you are familiar with this corner known as 
the Crilly corner at Dearborn and Monroe street, 120x 
104 feet? A. Yes, sir. 

Q. What, in your opinion, is that property worth? 
A. Seventy-live dollars a square foot, $9,000' a foot on 
Dearborn street and less on Monroe. That is 120 feet 
deep to an alley. 

Q. What interest rate do you take into consideration 
in arriving at that figure? A. W^ell, that land should 
earn 4 per cent., and this is computed on a 4 per cent, 
basis. 

Q. What would you consider the rent of this proper- 



144 

tj at the present time, a fair> annual rental? A. Four 
per cent, on the land alone ; 4 per cent, net return upon 
the land alone. 

Q. That is upon the valuation that you have given, 
$75 per square foot? A. Yes, sir. 

Q. On a 6 per cent, basis, an income of 6 per cent., 
how would that affect the landlord 's estate in that prop- 
erty? A. It would affect it favorably. 

Q. How would it atfect the value of the landlord's es- 
tate? A. If the property yielded 6 per cent, on the 
actual value, it would be a larger return, and hence the 
landlord's estate would be advanced. 

Q. This lease under consideration here with Mr. Cril- 
ly contains a revaluation clause, requiring the property 
to be subject to revaluation every ten years. What, in 
your opinion is the eifect of that provision of the lease 
on the rental that the tenant under that lease should 
fairly be expected to pay? A. AVhat is that question? 

(The question was then read by the reporter.) 

A. Well, he could not afford to pay as much as he 
could for a ninety-nine year straight lease, if that is 
what your question implies. Such is the fact, in my 
opinion. 

Q. Are you jorepared to say to what extent it would 
affect the rental that he should pay it? A. Well, that 
is an awful hard thing to say. Considerably less, but I 
could not say how much; perhaps 10 per cent, less than 
if he had a straight lease for ninety-nine years. 

Q. In arriving at the value of property in the down 
town district in the City of Chicago at the present time, 
and in your opinion as to the value of this property, you 



145 

named it on a 4 per cent, basis, did you not, and you ar- 
rived at it on a 4 per cent, basis? A. A 4 per cent, 
basis is a fair and proper basis, in my judgment, to com- 
pute the value of land in the down town district ; that is 
to say, it is a proper return, in ni}^ judgment, for the 
land to realize. 

Q. Is that the basis on which values are estimated in 
the down to^\n district? A. Yes, I think so, for the 
land, on land alone; I mean the land exclusive of the 
building. 

Q. Have you sold any land or leased any land or 
loaned money on any land on that basis? A. Yes, I 
made a ninety-nine year lease on a piece on Wabash 
avenue, to Mandel Brothers, 70 feet north of Madison 
fronting east. 

Q. Did you make a loan on the building at the s.outh- 
east corner of State and Adams street? A. Yes, sir, 
$500,000. 

Q. That is the Strong property? A. That is known 
as General Strong's corner. 

Q. What is the size of that property? A. 100 by 148, 
100 feet on State street and 148 on Adams. 

Q. What square foot value would you place on that 
property? A. $100. 

Q. What, in your opinion, is the difference in the 
property values between property on 'State street and 
property on Dearborn street, which is the higher? A. 
There is a very material difference, there is. all the dif- 
ference that I have expressed, at least. 

Mr. BuTLEE : Well, I think that is all I care to ask Mr. 
Snow. 



146 



Examination hy Mr. Maker. - 

Q. Mr. Snow, property is worth just what it would 
sell for in the market, ain't it? A. Oh, no, not at all, 
Mr. Maher, not necessarily so at all. • -; 

Q. You think not! A. No, sir, it may sell for a gi-eaf 
deal less than it is worth, and a great deal more than 
it is worth. 

Q. In putting your value on this property, did you 
put it on as the land alone, clear and free of leas.e and 
exclusive of building, that the fee simple title perfect 
was worth $75 a square foot? A. Yes, sir, I did, except 
taking into account that it is improved, and taking into 
consideration the effect, whatever that was of that im- 
provement upon the land, but it is exclusive of all those 
things. 

Q. If it were vacant land, covered by no lease and 
no encumbrance, no lease of any kind or description, 
would that change your opinion? A. No, sir, I think not. 

Q. Do you think, Mr. Snow, that, if the present lease 
called for 4 per cent, on the cash value of the land, in- 
stead of 6, that it would be worth more or less in the 
market? A. It would make no difference whether it 
was 2 or 10: 

Q. So that in your opinion, if the owner of the lease— 
A. If this lease called for a rate contrary to what it does 
call for, it would make no difference in the value of the 
land. . . 

Q. So that the lease does not cut any figure in the 
market value of the land? A. Not in the market value 
of the land, but I make a distinction between the land- 
lord's estate and the land. 



147 

Q. Take the landlord's estate; do you think that it 
wonld affect the landlord's estate favorably or nnfavorr 
ably, if the lease called for 4 per cent, instead of 6? A. 
Unfavorably. 

Q. That is, the landlord's estate would be worth less 
on a 6 per cent, basis than on a 4 per cent basis 1 A. No, 
the landlord 's estate would be worth less on a 4 per cent, 
basis than on a 6 per cent. 

Q. Four per cent, would be worth less ? A. Yes, sir. 

Q. So that the landlord's estate on a 6 per cent basis, 
whether the lease contained a revaluation clause or not, 
would be worth more than on a 4 per cent, basis? A. 
Yes, sir. 

Mr. Keefoot: Q. You spoke about your loaning a 
great deal of money down town on property, did you not? 
A. Yes, sir. 

Q. Aren't you rather conservative in your valuations 
in reference to loaning money! A. I hope I am, I would 
not dare s.ay I would not be. 

Q. Do you know what Rector pays for his corner? A. 
Yes, but I have not it in mind. There is one fallacy in 
considering all these things and attempting to fix them 
arbitrarily. Take the Netcher lease on Madison street; 
there is an instance where the land was appraised at a 
wrong figure. 

Mr. Keefoot: Do you know why? 
A. Yes, I know why. 

Mr. Keefoot: The foundation of the valuation was 
Mr. Netcher 's own offer to the firm. 

The Witness : "What I want to illustrate to you, gen- 
tlemen, is. just this. There were appraisers who were 



148 

eminently, qualified to determine the value of that prop- 
erty, and they arbitrarily added 20 per cent, to the value 
of the land, and then the rent was determined by that 
added value. So far as the record shows, the rent is so 
much a year, and, if you capitalize that rent at 4 per cent, 
you get a valuation which is fictitious. It shows the fal- 
lacy of attempting to make that the basis of value. One 
must take into consideration every fact and circumstance 
surrounding the property to be considered. 

Mr. Butler: I would like to ask Mr. Snow a question 
about the comparison of this corner with the Tribune cor- 
ner and with the First National Bank corner, both of 
which are leased by the Board of Education. 

Q. Wliat, in your opinion, is the relative value of 
those corners, say the same amount of property, 104 feet 
on the corner of Madison and along Dearborn street a 
frontage the same as Mr. Crilly's 104 feet? A. I haven't 
given that enough thought to say definitely, excepting 
this: Madison street is a more valuable street and a 
higher priced street than Monroe street is, considerably 
so. For instance, we testified in the Inter Ocean case, 
Mr. Birkhoff and Mr. Knight and I, that the Inter Ocean 
property on Monroe street, 189 feet deep, was $5,000 a 
foot, wes.t of Dearborn. 

Mr. Knight : I made it higher, $5,500. 

The Witness: That is, 189 feet deep, whereas I had 
sold about that time on Madison street, right adjoining 
the Hartford building, at $5,500 a front foot, property 
100 feet deep. In other words, we put it higher, that 
much higher for 100 feet deep than for 189 feet deep on 
Monroe, and I think that fairly represents the relative 
values. We sold as high on Madison street, 100 feet deep, 



149 

in the same locality, as we appraised the Monroe street 
property for, which was 189 feet deep. 

Mr. Waterman : When was that ? A. That is where 
Judge Hanecy held that this, property was worth $4,000 
a foot. He took off 15 per cent, for the lease, and made 
it $3,400 a foot, and the court did not sustain him in that, 
but it did sustain him on the proposition that this prop- 
erty on Monroe street, 189 feet deep, was worth only 
$4,000 a foot, and that was considerably less than we ap- 
praised it at. 

Mr. Keefoot : You will admit that since you made that 
appraisement, Monroe street has made tremendous 
strides, in value. 

Mr. Snow : All that was in contemplation at the time, 

Mr. Keefoot: Well, it was not done, you could not 
see it. 
Mr. Snow : But the market had the effect of it. 

Mr. Keefoot : Wliy, here in this building back in here, 
this theater building here is benefiting this property very 
much, and as to this First National Bank building, it is 
a regular city in here. 

Mr. Snow : Well, that was known at the time of these 
transactions, it was known that negotiations were closed 
for those things,, but the buildings had not then been 
erected. 

Argument of Mr. Butler on Behalf of Mr. Crilly. 

Gentlemen, with your very kind indulgence, I want to 
speak now for about fifteen or twenty minutes concern- 
ing the value of this property, and I assure you that I 
will not exceed that limit of time — concernins: the value 



150 

of this property, and this leasehold of Mr. Crilly's, and 
I am only going to speak on two subjects in connection 
with it. The first is the value of this property. 

I want to say, to start with, that Mr. Crilly's disposi- 
tion in this matter is, as you well know from what you 
have seen, one of absolute fairness. He wants to pay a 
fair rent for this property, but he does not want to pay 
an excessive rental. He wants to pay such a rental as 
will permit him to have a return on his investment, just 
a fair return; that is all that he wants. The Board of 
Education is the fortunate possessor of this property. 
It has increased greatly in value since Mr. Crilly took 
hold of it in 1878, and, despite numerous differences of 
opinion that have arisen between Mr. Crilly and the 
Board, and a few instances where litigation was indulged 
in, they have gotten along on a friendly basis.. Every- 
body knows, however, that if Mr. Crilly had bought this 
property from the Board of Education, in the first in- 
stance, he would have made a great deal more money 
than he has under the present conditions. 

All he wants is a fair consideration, and I am sure 
that you are going to give it to him. I feel certain that 
Mr. Maher in his answer has done away with the point 
that I feared, when we first started this afternoon, you 
gentlemen might make some note of, and that is this, 
question between the 6 per cent, and the 4 per cent, basis. 
Now, Mr. Maher in his answer has fairly stated the posi- 
tion of the School Board, and I will take the time to 
read what he says from page 7 of his answer. 

(Counsel read from the answer of Mr. Maher at the 
point referred to.) 

Then on page 10, the final page, Mr. Maher further 
says in his answer what I will now read. 



151 

(Further reading from the an&wer of Mr. Maher.) 

So Mr. Maher is not inclined, and I am sure the School 
Board is, not, to try to make Mr. Crilly pay 50 per cent, 
more than his competitors pay, simply becaus.e the pres- 
ent rate happens to be 4 per cent. 

Then, also, to be taken into consideration, is the fact 
that, in figuring the values today they have changed the 
basis on which they figured the values when this lease 
was entered into. It was then 5 per cent. ; now it is down 
to 4. So, I take it, that Mr. Maher 's answer, and his fair 
disposition, and the fair disposition of this Board of 
Appraisers, that with those things in view there will be 
no disposition to do anything except what is right, and 
no disposition to dispute that really the thing to be ar- 
rived at is, What shall this property rent for? What 
shall the annual rent, in fairness, be, under all the cir- 
cumstances, and, when you arrive at that figure, I take it 
that Mr. Maher concedes that the figure you arrive at as. 
rental is to be capitalized at 6 per cent. 

So, if you accept the testimony of the gentleman who 
testified, Mr. Knight and Mr. Snow, who are well known 
to you, and who say that the annual rental of this prop- 
erty for 99 years under a straight lease should be $37,- 
440, if we were entering into a straight lease here, it 
would be, I believe, your opinion that that should be 
capitalized at 6 per cent, instead of at 4 per cent., and 
that would make the value of the property $624,000. 

Now, the question is, the two points that I want to dis- 
cuss: First, the value; and, next, the effect of clause 6, 
and in reference to the value I am going to be very brief. 
Mr. Knight and Mr. Snow have testified on that, and 
you are probably satisfied with their testimony. I think 



152 

in my statement, and in the reply I presented, I exempli- 
fied my comparison between this property and the Trib- 
une property and the First National Bank property. 
There is the best and most comprehensive comparison 
that can be made. There are not very many conditions 
in Chicago under which comparisons can be made. The 
circumstances, are so variant that it is difficult indeed to 
make a comparison, even between Mr. Crilly's corner 
and the Tribune corner, and if we do compare those cor- 
ners we find that Mr. Crilly — that the First National 
Bank (whose lease was made in 1900, only five years ago), 
is based on square foot value, at 6 per cent., of $40.67. 

If Messrs. Snow and Knight are right, at a 6 per cent, 
value of Mr. Crilly's corner, it would be $50; in other 
words, it would be ten dollars more per square foot than 
the bank is. paying on, or a 25 per cent, increase. 

Now, then, suppose that the corners were of about equal 
value five years ago, when the Board of Education with- 
out duress, and of its own free will and accord entered 
into the lease with the First National Bank for 99' years 
straight, and placed a value on this corner. If the Crilly 
corner at tliat time was of the same value as the First 
National Bank corner, it has increased 25 per cent, in 
value in the last five years, according to the testimony of 
Messrs. Knight and Snow. Is that fair? Do you think 
it has increased more than 25 per cent, in the last five 
years? 

The Tribune closed its deal with the Board of Educa- 
tion in 1899, a year before the First National Bank closed 
its deal. It closed from 1905 to 1915 on a 6 per cent basis 
at $45.69. Then, from 1915 to 1985, for 70 years, it is to 
pay on the s.quare foot value of $45.90. 



153 

NoWj then, the testimony is that Madison street prop- 
erty is more valuable than Monroe street property, that 
the Tribune property is more valuable than Mr. Crilly's 
property. So, then, it was more valuable than Mr. 
Crilly's property in 1899 by five dollars a square foot. 
Mr. Crilly's property in 1899 was worth $41 a square 
foot and the Tribune 's $46 a square foot. 

Now, gentlemen, when you consider this point that Mr. 
Crilly raised, that he mus.t compete with the Tribune 
building and the First National Bank building, both of 
which concerns have tremendous big buildings here, out 
of which they can get big rentals, and the cream of the 
cocoanut, when you get up to the tenth and twelfth sto- 
ries and the floors above that give you your real profit, 
consider our position when we come before you and ask 
simply for absolute fairness and absolute justness. Is.n't 
it more than fair? 

Now, we come to the question of this clause 6, and I 
want to say a few words about that, because clause 6 
seems to be treated rather lightly by Mr. Maher. 

Clause 6 says that you may take into consideration, in 
arriving at the value of this property, the improvements 
on the land and the character, condition, value, rental, 
expenses, and other particulars thereof, and any other 
facts or information from whatever source bearing upon 
the question of the actual value of said land, and that 
it shall be the duty of the lessee to furnish the apprais- 
ers promptly on request, a statement, s.howing the rental 
receipts, disbursements, and so forth. Now, all of that 
clearly shows that something was intended by that clause, 
which was not in the original lease. 

Now, this amendment, in which clause 6 is contained, 



154 

was made in 1888. Tlie original lease was. unsatisfactory, 
because it worked a great hardship on the tenants in 
many ways. There was a five-year valuation clause in 
the original lease instead of a ten year clause. The 
amendment of 1888 put in all these changes. There was 
a five-year re-valuation clause, now it is ten. In the old 
lease, all the appraisers were appointed by the School 
Board; now only one is appointed by the School Board. 
Notice of the appointment of the appraisers and of their 
meetings, under the old lease, was waived by the lessee. 
He had no way of finding out who the appraisers were, 
or "when they were going to meet. That was changed by 
the amendment so that he was advised who those apprais- 
ers were to be. Under the old lease, the lease could be 
terminated under certain conditions, without any notice 
to Mr. Crilly; under the new lease the lessor is. bound 
to give him sixty days ' notice before it can terminate the 
lease. Under the old lease, the rule at law as to ascer- 
taining the cash value of this property was the only thing 
that the appraisers could take into consideration. Under 
the new lease you can take into consideration the things 
enumerated in clause 6. 

Now, Mr. Maher, in his answer to our statement, has 
spoken of the case of Springer v. Borden, in the 210th 
Supreme Court reports of this state. Now, Springer v. 
Borden (as I have pointed out in my reply), is a case in 
which the old legal rule of cash value was the only thing 
considered. The court had no clause 6 before it for con- 
sideration in that lease. The court says: ''We cannot 
take into consideration the lease, the condition of the 
building, the income of the less.or, or any other facts and 
information which might help us to ascertain the value. 
We have got to stick to the old rule of law with reference 
to ascertaining the value of that property." 



155 

And so I say, gentlemen, that, when the amendment of 
1888 was entered into, this clause 6 was inserted into that 
amendment for the very purpose of avoiding that old 
harsh rule of law, which is all right when you come to 
sell the property, but when you come to lease it for a 
straight ninety-nine-year proposition, and under the cir- 
cumstances, of this lease, that old harsh rule of law 
worked a great hardship upon not only the lessee but 
upon the lessor, and this clause was inserted to avoid 
that rule of law. 

Therefore it is proper for you to take into considera- 
tion all of the things mentioned in clause 6 in arriving 
at the amount that Mr. Crilly should be required to pay 
under this lease. 

Now, I take the position that clause 6, in the amend- 
ment, is mandatory. The language is, that the appraisers 
shall be at liberty in forming their judgment of the value 
of the land, to take into consideration, so far as they deem 
it pertinent to do so — that is the language. You shall 
be at liberty if you deem it pertinent to do so, to take 
those things into consideration, and I wish to point out 
some reason why I believe that, under that clause it is 
not only your privilege, but it is your duty to take those 
things into consideration. 

I recited a minute ago, briefly, the history of the inser- 
tion of clause 6. I think that the history of that lease, 
and the reason why clause 6 was inserted in there, sup- 
ports the position that it was intended by the parties 
when they made that clause 6 and inserted it there, not 
only that you might take it into consideration, but that 
you should take it into consideration. Now, another 
point, if you should disregard that clause — clause 6, in 



156 . 

this lease, you would fail to give force and effect to lan- 
guage which is contained in the contract. You all know 
that in a contract in writing, every word is construed by 
the courts to have a meaning, if they possibly can find 
a way to so construe it, and, if you fail to take these 
things into consideration that clause 6 mentions, you fail 
to give force and effect to language, which undoubtedly 
expressed the intention of the parties at the time they 
made that amendment. 

Now, one other point: This amendment was entered 
into in 1888. Mr. Crilly's. lease runs to 1985. Under this 
agreement nine appraisements were to follow that amend- 
ment ; one has taken place, one is now on, and seven more 
are to come. Now, that clause 6 of that amendment, if 
that is not mandatory, you may disregard it. The next 
set of appraisers may disregard it. Some other set, com- 
ing on twenty or forty or seventy years later, may disre- 
gard it. The next s.et of appraisers may regard it, and 
none others may regard it. And so you see, gentlemen, 
unless this clause is mandatory, it depends upon each set 
of appraisers to say whether or not they shall take those 
things into consideration, and thereby a large element of 
speculation is thrown into this leas.e which the parties 
most concerned certainly intended should be as absolute 
and definite as it was possible to make it. 

So I say it was intended that you should take heed of 
clause 6 and consider the things that you are entitled to 
consider, because, if you do not, the next set of apprais.- 
ers may, even though the value of the property, for in- 
stance, in the next ten years has gone up. If you do not 
take that clause into consideration, and the next set of 
appraisers do, they may find that the rental Mr. Crilly 
should pay is less than the rental you find you should pay. 



157 

So the only safe, stable and satisfactory basis on which 
we can deal with this clause 6 is to give it the life and the 
force that the parties must certainly have intended it to 
have. 

Now, another point : If you cannot take into considera- 
tion the effect of this revaluation clause on the rental that 
Mr. Crilly should pay — and you cannot take it into con- 
sideration unless you do so under clause 6 — if you don't 
take that revaluation clause into consideration, if the 
Board of Education insists that you have no right to take 
it into consideration, what is it doing there? It is ad- 
mitting that Mr. Crilly shall pay a rent which cannot be 
produced except by a modern bulding, and, at the same 
time, it is making it impossible for him to put up such a 
building. That is exactly the position. 

If we cannot arrive at the justice of this particular case 
by regarding the revaluation clause and these other det- 
rimental elements in this lease, then the Board of Edu- 
cation is trying to force Mr. Crilly to do something, and 
at the same time depriving him of the privilege of doing 
the very thing which it demands of him. I don't believe 
that the Board of Education intends to take that position, 
or that it intends or wants to do anything unfair with 
Mr. Crilly. 

I am just stating that to show you that, unless those 
things are taken into consideration, it is going to put Mr. 
Crilly, in a very, very embarrassing position, and I will 
admit right here and now that if testimony were brought 
in here to prove Mr. Maher 's claim that this property is 
worth $100 a square foot, and you gentlemen should so 
find, and if you disregarded clause 6, you could find that 
Mr. Crilly would have to pay 6 per cent, on $100 a square 
foot, which would raise his rent to $75,000 a year. That 



158 

is the situation under this leas.e, and that very possibility 
is the thing that makes the whole business a hazard and a 
gamble, and makes it unsafe, as Mr. Knight says. He 
says that he has not a client in his office that would loan 
a dollar on the building under a lease of that kind. 

Another thing, I don't believe that the Board of Educa- 
tion wants to ask this, Board of Appraisers to disregard 
this clause 6, because so to do would be absolutely to 
refute the contract into which it has entered. Clause 6 
either means something or it means nothing. If it means 
nothing, it is a jargon of words, a mere sham and a void 
which works an injustice for the very man whose rights 
it was, intended to protect and enforce. 

Now, just one word more, and I have taken up all 
your time that I am going to take. Mr. Maher says on 
the last page of his answer that $100 a square foot is the 
fair value of this property. He says that from an inves- 
tigation of values down town, the minimum value would 
seem to be about $100 a square foot; but, as I have tried 
to point out in my answer, there is no statement in Mr. 
Maher 's ans.wer which warrants this in a logical deduc- 
tion. Mr. Maher has stated certain real estate transac- 
tions, which he cites, only twenty-five of them, that ex- 
tend back to 1891, and I guess he has only picked out 
some little corners. 

We all know that a corner is valuable. One foot at the 
corner of Dearborn and Monroe, out of Mr. Crilly's block, 
might be worth a fortune if somebody had it who wanted 
to be arbitrary with it. Ten square feet would be very 
valuable, but the further back you go the less valuable it 
becomes, so these citations by Mr. Maher, I think, are 
hardly fair. They are mostly corners, the Netcher, the 
Rector and the Real Estate Board Buildings; all those 



159 

little corners where the values are high. We cannot de- 
duct anything logically from those citations, to tell you 
how to arrive at the value of this property. Eleven out 
of the twenty-five were State street property, and every- 
body knows that is the most valuable property in the City 
of Chicago. 

It was testified to ten years ago that there was not any 
down town property in London or in Paris or Berlin or 

New York or Boston that was as valuable as the down 
town property in the City of Chicago. 

Mr. Kerfoot: The man who testified to that has 
changed his views to-day. 

Mr. Butler : Where has it gone up? 

Mr. Kerfoot: In New York and Berlin, Paris and 
every other place except Chicago. 

Mr. Butkbr: I was simply using that as an illustra- 
tion to show you that these citations of Mr. Maher would 
hardly afford a logical or satisfactory basis from which 
to arrive at the value of this property, but I repeat that 
we want to pay every dollar that we can afford to pay 
under the circumstances. 

Mr. Knight and Mr. Snow both testified that they 
would be glad to buy that property at $75 a square foot 
for some client, so that they could get $37,440 a year out 
of it. If Mr. Crilly's revaluation clause were eliminated 
from his lease, he would to-day be glad to pay $37,440 a 
year rent for that property, but, under the circumstances, 
with this revaluation clause in there, Mr. Crilly cannot 
borrow a cent on this property and he cannot sell it. He 
don't know what the value of it is; nobody knows what 
the value of it is, and he is simply helpless. 



160 

He does not disgiiise the fact that he wants this re- 
valuation clause eliminated. It certainly would not be 
fair to pay $37,330 a year, everything taken into consid- 
eration, because of the uncertainty of the other clauses 
in this lease. 

The revaluation clause taken from the amount of rent 
that he should fairly be required to pay. Mr. Snow said 
it was a hard matter to tell how mucli; he said he 
thought it was, perhaps, 10 per cent. 

If Mr. Crilly's rental is raised above that, you can 
very easily see from the statement which we have fur- 
nished you as to the income from that building, that 
he is not going to have any kind of a return on his in- 
vestment. 

The statement which I have taken from his books, 
shows that he has netted 6 7/10 per cent, on that prop- 
erty during the six most favorable years of his tenancy, 
for six years from March 1, 1898, to April 30', 1904, 
$10,370 a year, which is 6 9/10 per cent. Less than 7 
per cent, on his investment in that property during those 
years. 

I don't believe I have anything else to say, and I am 
very much obliged to you. 

Mr. MacLaeen : There is one thing I want to correct 
you on in your statement. That lease was made in 1895 
to the Tribune, and the second in 1897. 

Mr. Butler: And the third in 1899. There were three 
leases, 1898, 1897 and 1899. 

Mr. MacLaeen : 1895 was the main one, and there 
was a third one made in 1899, as you say. 



161 



Eeply Argument op Me. Maher. 

Just a few words, only. It is not denied, of course, 
that you gentlemen have a right to take into considera- 
tion everything surrounding the property; not only on 
the property itself but on adjoining property. 

I don't know of any way that a just appraiser could 
get at the value of real estate unless he did take into 
consideration the surroundings of the property and every 
element that enters into its value. Clause 6, of course, 
is there, and I believe, if my memory serves me right, 
that there is a clause there in that lease that says that 
you gentlemen are not bound by the statements made by 
any of us. 

The fact, however, remains, and the argument made 
by us in regard to the 6 and 4 per cent., is simply this. 
Let us consider that we have a very fair bargain when 
the lease gives us 6 per cent, on the actual cash value of 
the land. It is for that reason that we would not in- 
sist that you gentlemen should appraise the value at 
the highest possible figure that could be put upon it, be- 
cause of the fact that our lease provides for 6 per cent, 
return on the cash value. Neither should you bear down 
the price away below its actual cash value simply be- 
cause we have made a good lease. 

If the Tribune and the First National Bank were for- 
tunate enough to drive a good bargain with the Board 
of Education, it is no reason why the Board should lose 
out on this lease. 

Another thing I wish to say is that the lease provides 
as to how the rental shall be fixed. You gentlemen are 
not to fix the rental but the value of the land. 



162 

Counsel seems to be begging the question when he 
says that the rent could not be paid with a modern build- 
ing. The answer to that is that if they put a modern 
building on there, it would be all right. 

If the lessee wishes to enter into a lease of this descrip- 
tion and then leave the property unimproved and mis- 
managed, is that any reason why the Board of Education 
should not receive its rental, because of the manner in 
which the man manages his property. 

Ain't it a strange argument to come in here and tell 
you, by implication, at least, that Mr. Crilly is going 
before the Board of Education, and ask for a straight 
lease? The fact is, Mr. Crilly entered into this lease with 
his eyes open, and if the lease had been a bad bargain 
for us, the Board would have had to stand by it. If it is 
a bad bargain for Mr. Crilly, I presume he does not give 
that was a reason for breaking the contract. 

Of course the Board does not desire that they shall 
have the utmost farthing of the cash value of the prop- 
erty simply because they have a lease which calls for 6 
per cent., but still they do not think that you gentlemen 
ought to fix the value away below its cash value simply 
because the lease does say 6 per cent., and then it appears 
that the prevailing rate of interest is 4 per cent, on the 
value of the land. 

Of course clause 6 should not be held meaningless. 
The appraisers are to get all the information that they 
can obtain, and from all sources, I take it, and if they 
did not do that they would not be doing their duty, and 
it could be said in a court of justice afterwards that the 
appraisers arbitrarily put a value on the land far be- 
yond its actual value without seeking any information or 
light on the subject, and thus it could be shown to be a 



163 

fraud. The sole purpose, in my estimation, of clause 
6, is to provide for the means by which you gentlemen 
may arrive at your conclusion. 

I must insist that the Tribune Building and the First 
National Bank Building have increased the actual cash 
value of the Crilly property, and whether Mr. Crilly sees 
fit to take advantage of modern methods in conducting 
the property which he leases, is none of our affairs, and 
if that property is actually worth in the market a higher 
price than it would be if these other buildings were out 
of here, the Board of Education is entitled to that in- 
crease and Mr. Crilly must bring himself within modern 
methods. 

Mr. Chilly: What could the First National Bank or 
the Tribune do with modern methods under the old 
lease! 

Mr. Mahee: I don't know, all I do know is that they 
got their leases, and that is not a reason why the Board 
should lose out on your lease. You made your lease 
with your eyes open, and when you say that such rent 
cannot be made without a modern structure, as your 
counsel said here a minute ago, it simply fixes that — it 
fixes the proposition that you are not running under 
modern methods if you can't afford to pay the rent on 
the actual cash value of the property. The question as 
to whether he can borrow money enough to put up a 
modern building, should not be considered at all. The 
question with him should be, if a modern building is put 
up there, would it be a paying venture, and I think that 
you gentlemen will agree with me that he could borrow 
money enough to put up a modern building. 

Mr. Crilly: Not under this lease. 



164 

Mr. Butler: You could not get it under this lease if 
you liad a million-dollar building on the corner. 

Mr. Mahee: That cannot be taken into consideration. 



Estate of Gteo. Rounsavell. 

Estate of Henry Weil. 

Benjamin J. Rosenthal. 

Louis Eckstein. 

Louis M. Stumer. 

Estate of Geo. B. Jenkinson. 

A. Bishop & Co. 

Statement in Behalf of above Parties by Levy Mayer 
AND Donald L. Morrill, Their Attorneys. 

To the Honorable Messrs. John McLaren, 

Arha N. Waterman and 'William D. Kerfoot, 

Appraisers of School Fund Property: 

Gentlemen : 

The undersigned lessees having heretofore tiled with 
your Honorable Body a protest against the jurisdiction 
of your Honorable Body, and of each member thereof, 
and of the legal right of your body, and each member 
thereof, to jointly or severally act as appraisers in the 
premises, for the reasons set forth in said protest, pre- 
sent herewith the following statement and argument 
without in any way waiving or abandoning any of the 
rights of the undersigned, or any or either of them, or 
any of the benefits by reason of the objections referred 
to in each of said protests, but expressly reserving to 
the undersigned lessees any and all rights which they, 
or either of them may have to contest the validity of any 
appraisal made by your body, or any or either of you. 



165 

And the undersigned present this statement and argu- 
ment solely for the purpose of bringing to the attention 
of your Honorable Body the facts necessary to arrive at 
a proper and fair conclusion in the premises. 



The various lots in which the parties presenting this 
statement and argument are interested, are as follows : 

Lot 7 in block 142, of which the estates of R. C. Roun- 
savell and Henry Weil, both deceased, are the owners 
of the leasehold; said premises being known as No. 146 
State street, and being improved with a six-story brick 
and stone building. 

Lot 31 in block 142, of which Benjamin J. Rosenthal 
and Louis Eckstein are the lessees, being known as No. 
150 State street, and being improved with a four-story 
brick and stone building. 

Lot 32 in block 142, of which Louis M. Stumer is the 
lessee, known as No. 152 State street, and improved with 
a four-story brick and stone building. 

Lot 33 in block 142, of which the estate of George B. 
Jenkinson, deceased, is the lessee, known as No. 154 State 
street, and improved with a four-story brick and stone 
building. 

Lot 34 in block 142, of which A. Bishop & Company, a 
corporation organized under the laws of Illinois, is the 
lessee, known as No. 156 State street, improved with a 
four-story brick and stone building. 

All of the above pieces of property are held under 
original and supplemental leases from the Board of Ed- 
ucation of the City of Chicago, dated respectively May 
8, 1880, and June 15, 1888. For the purposes of this 
argument we assume that these leases are before you, 



166 

and for tliat reason no abstract of their terms or condi- 
tions is presented herewith. 

Each of said above lots is 24 feet by 120 feet in size, 
and all of said lots are located on the west side of State' 
street, between Madison and Monroe streets. 

The details with reference to each of said pieces of 
property are as follows : 

Lot 7 in block 142: 

It is impracticable to obtain an account of the income 
and outgo of the above building prior to August 1, 1889, 
for the reason that the owner of the building in those 
days, Mr. R. C. Rounsavell, died in the month of Au- 
gust, 1899, and his books are not accessible. His nephew, 
Mr. E. J. Rounsavell, knew this income and outgo and 
estimates that the income of the building during that 
time averages $16,000.00 per year. The expenses as 
estimated by him were about an average of $250.00 per 
month; not including ground rent, $9,000.00 per year, 
taxes about $400.00 per year, and loss of rent which it 
is impossible to state definitely. The loss of rents were 
occasioned by vacancies and failure of the tenant to pay ; 
for instance, Florsheim failed and was owing between 
six and seven thousand dollars in rent. The fifth, sixth 
and seventh floors during that period were unsatisfac- 
torily tenanted, or vacant. Each of these floors was rent- 
ed at an asking price of $75.00, but the vacancies and 
the loss of rent by insolvent tenants were so great that 
these three floors probably did not average more than 
$75.00 a month actual money in hand, that is to say, dur- 
ing the first five years : 



167 

Income per year, $16000.00 

Ground rent, $ 9000.00 

Running expenses, 3000.00 

Taxes, _ 400.00 

Loss of rent and vacancies 1800.00 



Total income $16000.00 Outgo $14200.00 



Net profit $ 1800.00 

August 1, 1899--January 1, 1890: 

Income, $ 5700.36 

Ground rent, $ 3000.00 

Running expenses, 1112.89 

Taxes, 428.00 
Refunded to tenants on the 

burning of the building, 820.00 



Total, $ 5700'.36 $ 5360.89 



Net profit, $ 339.47 

January 1, 1900^ — January 1, 1901. 

Burning of the Building. 

The building was burned down in the early part of the 
winter of the year 1899, and no rent was collected until 
August 1, 1900. 

The ground rent, however, 

was paid and amounted to $ 6000.00 

The expense of wrecking the 

building was 560.00 

The cost of rebuilding spent 

at the time 32500.00 

There was afterwards spent 
in adjusting disputed ac- 
counts and matters, which 
were not paid until later 2500.00 

Besides that there was inter- 
est on money. 



168 

The total of outgo up to 

Sept. 1900, was $41560.00 

The income from Jan. 1, 1900, 

to Jan. 1, 1901, was $ 5230.00 

The second floor being vacant 

all that time. 
The running expense during 

that time was 1052.79 

Taxes, 428.00 

Total income from Jan. 1, 
1900, to Jan. 1, 1901, was— 

Totals, $ 5230.00 $43040.79 

Deficit, $37810.79 

January 1, 1901— January 1, 1902. 
Total income, $18194.00 

Ground rent, _ $ 9000.00 

Expenses for running build- 
ing 4404.30 
Taxes, 450.00 

Totals, $18194.00 $13854.30 



Net profit, $ 4339.70 

January 1, 1902 — January 1, 1903. 

Income, $19694.00 

Ground rent, _ $ 9000.00 

Running expenses, 5210.00 

Taxes, 450.00 

Totals, $19694.00 $14660.00 

. Net profit, $ 5034.00 

January 1, 1903 — January 1, 1904. 

Income, $19899.00 

Ground rent, " $ 9000.00 

Running expenses, 5649.00 

Taxes, 428.00 



Totals, $19899.00 $15077.00 

Net profit, $ 4822.00 



169 

January 1, 1904 — January 1, 1905. 

Income, $23799.00 

Ground rent, $ 9000.00 

Eunning expenses, 5499.46 

Taxes, 428.00 



Totals, $23799.00 $14927.46 



Net profit, $ 8871.54 

Lot 31in block 142: 

Under the appraisal of 1895, the value of this lot was 
fixed at $165,000, being $6,875 per front foot, making 
the present ground rental $9,900 per year. The lessees 
receive a net annual income of $1,650 from the premises 
in question, the ground rent, taxes, repairs and all other 
expenses of maintenance being paid by the sub-lessees. 

Lot 32 in block 142: 

Under the appraisal of 1895, the value of this lot was 
fixed at $150,000, being $6,666.66 per front foot, making 
the present ground rental $9,000 per year. The lessee 
derives a net annual income from these premises of 
$1,500, all ground rent and other expenses of mainte- 
nance being paid by the sub-tenants. 

Lot 33 in block 142: 

Under the appraisal of 1895, the value of this lot was 
fixed at $150,000, being $6,666.66 per front foot, making 
the present ground rental $9,000 per year. 

The average annual receipts derived from the 

building during the last ten years are $13576.66 

The average annual expenses during the said 
period are as follows : 



170 



Ground rent, $9000.00 




Taxes, 403.29 




Insurance, 241.50 




Expenses of collection, commissions, 156.39 




Legal expenses in connection with 




sub-leases, 134.10 




Eepairs, 218.00 






$10153.28 



Leaving a net annual income of $ 3423.38 

Lot 34 in block 142: 

Under the appraisal of 1895, the value of this lot was 
fixed at $150,000, being $6,666.66 per front foot, making 
the present ground rental $9,000 per year. During the 
last year, the premises have been occupied by A. Bishop 
& Co., the present lessees, as a retail store, but for the 
purposes of this statement the property is credited with 
the amount of rent formerly paid by them, as sublessee. 

Average annual receipts derived from building 

during the last ten years are $12900.00 

Average annual expenses during said period 

are as follows : 

Ground rent, $9000.00 

Taxes, 40L22 

Insurance, 173.08 

Repairs, 253.19 

Expenses of collection, 258.00 



$10085.49 

Leaving a net annual income, 
as a return upon the invest- 
ment, of $ 2814.51 

From the foregoing condensed statement of the in- 
come and expenses of two of the lots in question, which 
includes no extravagant sums for repairs, incidental ex- 



171 

penses, or other items sometimes used to swell the debit 
account of a building, and no allowance whatever for the 
depreciation of the building, it is apparent that the in- 
vestment in these leaseholds is not profitable, and that 
it would probably be impossible for the Board of Educa- 
tion to find tenants for this property were it not for the 
exigencies of retail trade and the limited territory avail- 
able for that purpose, conditions which have prevailed 
during the past ten years, but which may not continue to 
exist during the succeeding ten years. 

It should also be noted that during the succeeding ten 
years the amount of the taxes payable by the lessees un- 
der the terms of their leases will be largely increased, on 
account of the recent decision of the Supreme Court in the 
case of People ex rel. Hanherg v. The City of Chicago, 
now pending on motion for rehearing. Assuming that 
the opinion of the court heretofore rendered will stand 
without modification, it follows that the taxing authori- 
ties will levy a tax against the Board of Education based 
upon the full taxable value of the land, which amount the 
lessees are obligated to pay notwithstanding the fact that 
at the time these leases were executed the property was 
supposed to be exempt from taxation, under the statute 
and under the decisions of the Supreme Court of this 
state in the cases of City of Chicago v. People (80 111., 
page 384), and The People ex rel. Little v. Trustees of 
Schools (118 111., page 52). 

Assuming that the property in question cannot be ad- 
ministered in any more economical manner than at the 
present time, it follows that any increase in ground rent 
under the terms of these leases will amount to confisca- 
tion and result in the cancellation of the leases in ques- 
tion, as was the case with the lease of the four lots at 



172 

tlie northwest corner of State and Monroe streets, after 
the appraisement of 1895. Briefly stated, the valuation 
fixed by the appraisers in 1895, upon the property at 
the northwest corner of State and Monroe streets caused 
the financial failure of the firm of Frank Brothers, the 
sub-lessees of the property, thereby throwing the lease 
back upon the hands of Lucius B, Otis, who was then the 
lessee of the Board of Education. Mr. Otis voluntarily 
surrendered his lease and paid to the Board of Educa- 
tion the sum of ten thousand dollars, and donated the 
building upon the property in consideration of his re- 
lease from further liability under the terms of the lease. 
The property was then vacant for a period of about four 
years, at the expiration of which time the Board of Edu- 
cation found it advisable to execute a long-term lease 
on the property under a fixed rental. 

We also call your attention to the fact that in 1891 
Thomas G. Otis, the lessee of lot 34 in block 142, leased 
the premises to A. Bishop & Company until May 1, 1896, 
at a rental of $13,000 per year. On September 20, 1894, 
a new lease was made, beginning May 1, 1895, expiring 
May 1, 1900, at a rental of $6,000 a year, the lessee as- 
suming the ground rent of $9,000. This lease was can- 
celed on December 11, 1897, by a lease running from 
May 1, 1898, to May 1, 1905, at a reduced rental of 
$12,000, which even at that time was considered exces- 
sive. 

The conclusion seems irresistible that a similar re- 
sult will follow in the case of any substantial increase in 
the ground rent under the leases now under considera- 
tion, unless the lessees can remove the present improve- 
ments and erect modern buildings upon the property, and 
thereby increase their revenues, a condition which seems 



178 

impossible to fulfill on account of the limited area of each 
of the lots. 

We shall, therefore, present to the appraisers our 
views as to the construction which should be placed upon 
those portions of the leases which indicate the functions 
to be performed by the appraisers and some reasons why 
the present ground rental of the property in question 
should not be increased at this time. 



The problems which confront the parties to these 
leases in the present proceeding, and which the apprais- 
ers are expected to settle for the next ten years, are of a 
peculiar character, calling for the exercise of a sound busi- 
ness judgment and the application of reasonable rules of 
construction. It has been said that these leases ''illus- 
trate the truth that in seeking to have the tenant entirely 
within his power, and at his mercy, the landlord some- 
times overreaches himself." Many arguments have 
been addressed to appraisers and courts, based upon the 
alleged harshness of the contract in question. We con- 
sider that such arguments are irrelevant, because the 
contract, in its existing form, cannot be changed by the 
appraisers, no matter how antiquated and unwise some 
of its provisions may appear, and regardless of obvi- 
ous amendments which might be made to the advantage 
of both lessor and lessee. 

It will be admitted without argument that the condi- 
tions which existed 25 years ago, when these leases were 
made, or 17 years ago, when the supplemental agree- 
ments were executed, are not the conditions which exist 
today, and that at the present time no sane person would 
enter into such an agreement as that which is under dis- 



174 

cussion. However, the fact remains that these leases 
have in many cases changed hands during the last ten 
years, from which it may be argued that there are still 
some persons to be found who are willing to subject 
themselves to the hardships of a contract which has 
been the subject of so much complaint in the past. Lest 
it may be concluded that the lessees represented in this 
statement have acquired their holdings for speculative 
purposes, it is proper to state that two of the five leases 
in question are held by heirs or legatees of the original 
lessees, who should not be punished for the mistakes of 
their ancestors, and that the remaining three leases are 
held by persons who were obliged to acquire them for 
business reasons, in order to escape the exactions of the 
owner of the ground and the landlord of the building. 
In other words, having, by years of labor, built up a 
rental business as sub-lessees of the premises, they find 
themselves ultimately obliged to buy both building and 
leasehold, or to submit to a ruinous handicap in the fierce 
competition for trade. 



Surely, under such circumstances, the lessees are enti- 
tled to such consideration at the hands of the appraisers 
as a liberal construction of the terms of the lease will 
permit, having due regard to changed conditions which 
have arisen during the past 17 or 25 years as to rates of 
interest, methods of transportation, the concentration 
of retail business in department stores, the construction 
of buildings in the business district of Chicago, the earn- 
ing power of the buildings located upon the leased prop- 
erty, changes in the building ordinances of the City of 
Chicago, amendments to the revenue and local improve- 
ment laws, as well as to the unfortunate history of many 



175 

real estate enterprises involving the construction of ex- 
pensive buildings upon leased ground within the busi- 
ness district of Chicago. 



Under the terms of the leases in question, the apprais- 
ers are required to determine "the true cash value of 
said demised land at the time of such appraisal, exclu- 
sive of the improvements thereon." It will doubtless be 
contended, on behalf of the Board of Education, in this 
appraisal, as it has been in the past, that the words are 
to be taken in their literal sense, and that the apprais- 
ers are thereby restricted to a consideration and deter- 
mination of the actual cash value of the real estate in 
question as fixed by sales and leases of other property 
similarly located; and that no consideration should be 
given to the fact that the existence of the lease has a 
depreciating effect upon the value of the property, a 
view which has been sustained by two prominent judges 
in this county within the last ten years. 

Doubtless, reliance will be placed upon the recent de- 
cision of the Supreme Court in the case of Springer v. 
Borden (210 111., page 518), in which the court holds 
that the appraisers in that case were not bound *Ho take 
into consideration the effect of the lease on the value of 
the fee." We have not before us for consideration the 
lease which was involved in the case of Springer v. Bor- 
den, and the opinion of the Supreme Court does not dis- 
close the full text of the lease^ but it is fair to assume that 
the words which determine the duties of the appraisers 
were not limited or modified by any other language what- 
ever. Under these circumstances, it is respectfully sub- 
mitted that the opinion of the court in Springer v. Bor- 
den cannot be regarded as an authority applicable to 



176 

leases differing materially in their terms from the lease 
which was then before the court. 

The leases which are now before the appraisers in the 
case at bar, in addition to the words above quoted, con- 
tain other language which appears upon its face to be, 
if not contradictory, at least as having the effect of modi- 
fying and limiting the literal meaning of the quoted 
words. We refer to the following language, to wit: 
"that, notwithstanding anything in said lease contained, 
the appraisers shall be at liberty, in forming their judg- 
ment of the value of the land, without including the value 
of the improvements thereon, to take into consideration, 
if and so far as they deem it pertinent to do so, the im- 
provements on such land and the character, condition, 
value, cost, rental, expenses and other particulars there- 
of, and au}^ other facts or information from whatever 
source bearing upon the question of the actual value of 
said land." 

It will bQ noticed that in the first quotation the f ramers 
of the leases used the terms "cash value," and in the 
last quotation the term "actual value." It may be that 
some arguments might be presented indicating that these 
terms are synonymous, but it is apparent that in con- 
struing the present leases the terms should not be so 
regarded. The supplemental leases, in which the quoted 
words are used, were the result of a compromise between 
the Board of Education and its tenants and were the 
terms of settlement of numerous litigated cases in which 
the most distinguished legal talent of the city was em- 
ployed, and it is fair to presume that the words em- 
ployed in framing these documents were used with the 
expectation that they would be interpreted in a reason- 
able way, giving such meaning to them as would appear 



177 

proper to business men in the ordinary transaction of 
their daily atfairs, and not such construction as may be 
put upon them by courts and lawyers when seeking to es- 
tablish technical definitions for the lourpose of some par- 
ticular ease under consideration. 

For that reason, we cite no authorities as to the mean- 
ing of these words, believing that it was the intention 
of the contracting parties that the appraisers should 
adopt their own reasonable construction of the terms of 
the lease, rather than that they should rely upon tech- 
nical definitions in hotly contested cases arising under 
the laws of various states relating to taxation and emi- 
nent domain. 

It maj^ not be out of place, however, to call your at- 
tention to the rule laid down by Lewis in his work on 
Eminent Domain, Sec. 478, which is as follows : 

"In estimating the value of property taken for 
public use, it is the market value of the property 
which is to be considered. The market value of 
property is the price which it will bring when it is 
offered for sale by one who desires, but is not 
obliged to sell it, and is bought by one who is under 
no necessity of having it. In estimating its value, 
all the capabilities of the property and all the uses 
to which it may be applied or for which it is adapt- 
ed, are to be considered, and not merely the con- 
dition it is in at the time and the use to which it is 
then applied by the owner. It is not a question of 
the value of the property to the owner, nor can the 
damages be enhanced by his unwillingness to sell. 
On the other hand, the damages cannot be measured 
by the value of the property to the party condemn- 
ing it, nor by his need of the particular property. 
All the facts as to the condition of the property and 
its surroundings, its improvements and capabilities 
may be shown and considered in estimating its 
value. ' ' 



178 

It is apparent that the parties to these leases, in de- 
fining the functions of the appraisers, had in view the 
determination of the cash value of the land under all 
the circumstances involved in its use under the terms 
of the lease. It is undoubtedly true that it is the duty of 
the appraisers, as required by the paragraph secondly 
above quoted, to determine the actual value of the land, 
having due regard to the improvements, the character, 
condition, value, cost, rental, expenses and other par- 
ticulars relating thereto. In other words, if it shall 
appear to the appraisers that the property in question 
is being economically administered, that it is contrary 
to good business policy to undertake the erection of ex- 
pensive modern buildings under a lease calling for a 
revaluation of the ground every ten years (provided it is 
possible to erect such a building upon a lot 24 feet by 
120 feet in size), if the present valuation of the ground 
prevents any profit whatever, or a very meager profit to 
the lessee, we contend that a reasonable and just inter- 
pretation of the terms of the lease will compel the ap- 
praisers to reduce the present rental. In fact, it is not 
only right in appraising under the leases in question, that 
the appraisers should take into consideration the effect 
of the leases themselves upon the value of the property, 
but it is the duty of the appraisers to do so under the 
plain and unambiguous terms of clause 6 of the supple- 
mental lease above quoted from, because by that clause 
it is provided that the appraisers shall be at liberty "to 
take into consideration, among other things, the im- 
provements, the character, condition, value, cost, rental, 
expenses and other particulars thereof, and any other 
facts or information." If, then, as a matter of fact, the 
lease in question does affect the value of the land (and 



179 

we take it this cannot be disputed), then such fact must 
be considered by the appraisers if they are to fairly de- 
termine the value of the land. 



The present rental of the property in question should 
not be increased, because the valuation established by 
the appraisal of 1895 is the full actual cash value of the 
property in question, taking into consideration the rate 
of interest upon which the rental is based, the conditions 
of the lease, and other considerations referred to in para- 
graph 6 above quoted of the supplemental lease. 

Probably it will be insisted by the Board of Educa- 
tion, with some show of plausibility, that a valuation of 
$6,700 per front foot for property located on the west 
side of State street, between Madison and Monroe 
streets, falls far short of the full cash value of the land 
as determined by sales and leases of other property 
within the business district of Chicago, more or less simi- 
larly situated, and it must be admitted that many such 
sales and leases can be cited, but it should be borne in 
mind that it is not the object of the Board of Education 
to require its lessees to engage in perilous speculations 
in the erection of high-class, modern buildings upon 
leased ground. 

The Board of Education does not desire that any of its 
tenants shall meet the same fate as Frank Brothers and 
Lucius B. Otis, or that it shall be involved in such losses 
as were incurred by the owners of the Real Estate Board 
Building, the Security Building, the Unity Building, the 
Stewart Building, the Schiller Building, the Kedzie 
Building, the Illinois Bank Building, the Giddings Build- 
ing, the Bort Building, the Monroe Restaurant, Medinah 



180 

Temple, Steinway Hall, Opera House Block, Women's 
Temple, Great Northern Office Building, and possibly 
others. Neither does the Board of Education expect that 
its lessees shall be called upon to pay rental upon the 
basis of sales or leases at high prices, determined largely 
not by intrinsic value of the land, but by the require- 
ments of business considerations, such as the transac- 
tions between Williams and Stevens at 113 and 115 State 
street; between Leiter and Schlesinger & Mayer, at 
the cornet of Madison and State streets; between Beers 
and Siegel, at 215 State street; between McCormick and 
Partridge, at 112 and 116 State street; between Corwith 
and Young, at 180 State street ; between McCormick and 
McGinnis, at 208 State street; between Starkweather and 
Frazin, at Adams and State streets ; between Kraus and 
Siegel, at 155 State street, between Bloom and Petzer, at 
Jackson and State streets, between Partridge and 
Netcher, at 118 and 120 State street ; between Young and 
Carson, Pirie, Scott & Co., at 118 and 120 State street; 
between Ayer and Baumgarten, at Monroe and State 
streets; between Peak and Frazin & Oppenheim, at 187 
and 189 State street, or between the Jennings estate and 
Brauer, at 229 and 231 State street. If such a rule of 
construction of the leases in question is to prevail, no 
further argument is needed to show that it will amount 
to a confiscation of the buildings and leases, and the 
Board of Education will be driven to make new arrange- 
ments with subsequent tenants, as was the case with the 
lease held by Frank Brothers, at the northwest corner 
of State and Monroe streets. 

Again, it is apparent that the values established by 
the appraisal of 1895 were the full, actual cash values 
of the real estate in question, because the appraisers at 



181 

that time, all of whom were men of the highest standing 
in the community, and governed by a high sense of duty 
in the matter, have since the date of their appraisal 
signed a written statement to that effect. The state- 
ment referred to is as follows : 

''Chicago, January 24, 1902. 

Committee on Buildings and Grounds, 

Board of Education of the City of Chicago, III. 

Gentlemen : Upon the request of the representatives 
of the estates of James J. Gore, deceased, and Catherine 
Boomer, deceased, we take the liberty of making the fol- 
lowing statement to you : 

In 1895 we, as appraisers of Lots 28, 29 and 30, re- 
spectively, in Block 142, School Section Addition, made 
an appraisement of that land. At that time, we were of 
the opinion that the valuation fixed by us should then 
be the basis for a fixed valuation for the balance of the 
term. We are still of the same opinion. We think it 
only just to these gentlemen and the estates, that some 
arrangement should be reached whereby they can safely 
improve the property. We hope that you and the es- 
tates can come to some amicable settlement, so that this 
end can be accomplished. 

Yours respectfully, 

John McLaren, 

(Signed) Gwynn Garnett, 
Eugene Gary.'' 

The above letter needs no comment and it is unreason- 
able to suppose that the appraisers in 1895 adopted any 
different rule in the case of the Gore and Boomer es- 
tates, than was followed in the cases of other property 



182 

before them for appraisement. It was the opinion of 
those appraisers in 1895, and again in 1902, that the val- 
uations fixed by them were the full actual cash values of 
the property appraised as late as 1902. We respect- 
fully submit that there has been no increase in the value 
of this property, and no change in the conditions sur- 
rounding its occupancy, since 1902, and that therefore 
no increase in th6 value should now be made by the pres- 
ent appraisers, but, on the other hand, as the appraisers 
in 1895 fixed a value for a period of ninety years in- 
stead of ten years, as required by the leases, it naturally 
follows that their figures were excessive for a ten-year 
period and should now be reduced. 



The lots in question are small lots, with a frontage of 
24 feet only, which is insufficient for small retail stores 
requiring a full frontage for purposes of display. 

These lots, leased by separate and individual lessees, 
cannot be used to advantage for the construction of high 
buildings, for the reason that the space required for en- 
trance, for stairs, elevators and approaches to upper 
floors, under the present city ordinances, will reduce the 
available space from 25 to 40 per cent, upon the first 
floor, thereby rendering the first floor available for only 
a very small establishment, and making the upper floors 
undesirable for permanent tenants requiring roomy ac- 
commodations. 

The clause in the leases requiring the revaluation of 
the ground for the purpose of determining the rental 
renders it impossible for a lessee to obtain any loan what- 
ever upon the leasehold estate for building purposes, and 
makes it unsafe for a lessee to erect such a building out 



183 

of his own resources exclusively, for the reason that 
upon the recurrence of the next valuation, he will be in 
precisely the same position as before. It is also unwise 
for a lessee to attempt such an improvement upon a lot 
of this character, because the rental value of property 
has its period of boom and depression. In 1895 State 
street property was held at a high price. This was fol- 
lowed by years of depression, and then recuperation, un- 
til now values are at about the same figure as in 1895. 

The present condition is subject to change at any time 
by the opening of additional retail districts and changes 
in local transportation. It is possible that a subway 
system of transportation will be adopted for use in the 
business district in the near future and surface lines be 
removed from the crowded streets, and loops and ter- 
minals may change, all of which would have a marked 
effect upon the rental value of the property in question. 

As an illustration of the truth of the foregoing, the 
case of the property at the southwest corner of State and 
Congress streets may be cited. This corner, 40 feet by 
80 feet in size, improved with a three-story brick build- 
ing, brought a gross rental of $30,000 per year during 
the period when the terminal of the South Side Alley L 
was located at Congress street. At the present time 
and since the construction of the elevated loop, and the 
consequent change in the terminal of the South Side 
road, the gross rental of the property is $10,000 per 
year, and the net rental does not exceed $8,500 per year, 
on account of frequent changes of tenants, and the value 
of the fee has shrunk to $2,750 per front foot. It should 
also be noted that the shopping district is rapidly in- 
cluding Wabash avenue and Michigan avenue between 



184 



Eandolph and Van Buren streets, which will eventually 
be retail streets, and their use for that purpose will 
have a tendency to reduce values of .State street proper- 
ty used for similar purposes. 



That the present rental paid by the lessees of the 
property in question is the full cash value of the prop- 
erty, taking into consideration the rate of interest upon 
which the leases are based and the increased expenses of 
taxation, a large part of which inures to the benefit of the 
Board of Education, is shown by certain proceedings 
before the Committee on Buildings and Grounds of the 
Board of Education, taken about one year ago. 

At that time, the committee had under consideration 
the advisability of waiving the revaluation clauses in 
these and other leases and making straight leases for 
ninety-nine years upon a fixed rental, determined in ac- 
cordance with the present usages and theories prevail- 
ing in respect to the provisions of such contracts, such 
as requiring the construction of modern buildings and 
basing the rental upon a four per cent, basis, or in lieu 
thereof upon a 5 per cent, basis, in consideration of the 
supposed exemption of the land from taxation. Numer- 
ous experts were called to advise the board as to the 
actual cash value of the land in question upon such a 
basis, and the valuations were substantially as follows: 

H. B. Bogue— From $11,800 to $13,000 per front foot. 

Joseph W. Cremin— From $11,000 to $12,000 per front 
foot. 

J. H. Farrar — Average valuation $14,400 per front 
foot. 



185 

J. C. McLane— From $11,000 to $12,500 per front foot. 

A. B. Mead— From $11,000 to $11,500 per front foot. 

J. B. Prior— From $10,800 to $12,000 per front foot. 

Joseph Donnesberger— Average valuation $10,500 per 
front foot. 

Eugene Fishburn — Average valuation $12,000 per front 
foot. 

H. H. Walker — Average valuation $10,800 per front 
foot. 

The above values are substantially the values deter- 
mined by the appraisement of 1895, taking into consider- 
ation the fact that the rent under the appraisement of 
1895 is computed at the rate of six per cent, and the val- 
uations above cited contemplated the payment of rent on 
the basis of four per cent. As a matter of fact, the ad- 
ditional taxes which the lessees will be required to pay, 
under the recent decision of the Supreme Court above 
cited, amounts to an addition to the rental of nearly two 
per cent. While it is true that the payment of taxes is 
''nominated in the bond," nevertheless none of the con- 
tracting parties had such a possibility in view when the 
leases were executed, and therefore an equitable allow- 
ance for the same should be made in fixing the new rent- 
als. 



The volume of business of the retail specialty stores 
has not increased in the last ten years, due largely to the 
fact that such stores cannot utilize the upper floors to 
advantage. Department stores have not suffered in this 
respect, because their upper floors are rendered avail- 
able by reason of the advertising such stores are able 



186 

to do. The small retail stores are prevented from adver- 
tising to the same extent on account of the tremendous 
cost. 

The appraisers should consider that no permanent loss 
is imposed upon the public by conservative action on 
their part. If, during the next ten years, the present ex- 
isting conditions prevail unchanged, and the value of 
this property increases materially, the lessor will be in a 
position to take advantage of that fact in the appraise- 
ment then to be made. If, on the other hand, there 
should be another period of business depression, if the 
congested condition of the retail district is relieved, if 
subways are built and street cars removed from State 
street, if the larger retail houses move from State street 
and new retail districts are established, conservative ac- 
tion on the part of the appraisers in the present pro- 
ceeding will protect both lessor and lessee from serious 
loss. To a certain extent, that which is for the benefit 
of the lessee is also for the benefit of the lessor, and the 
past history of leasehold improvements in Chicago does 
not indicate that lessors have always gained from exact- 
ing the highest possible rent from their lessees. 



It is a well-known fact that no lessee of school property 
under a lease containing a revaluation clause would be 
safe in erecting a modern structure or in making any 
valuable or costly improvement whatever. A view of the 
property now under appraisement demonstrates this fact. 
The buildings are old and out of keeping with their sur- 
roundings. The splendid structures now being erected 
on school lands (the Chicago National Bank Building, 



187 

southwest corner of State and Madison streets ; the First 
National Bank Building on Monroe and Dearborn streets ; 
the Tribune Building on Madison and Dearborn streets, 
the Lehmann Building on Monroe street near State 
street) are the beneficent fruitage of the elimination of 
revaluation clauses in school land leases. Under long- 
term leases with a fixed rental, the lessees would be en- 
abled to erect modern structures which would have the 
effect not only of beautifying the city, but of vastly in- 
creasing the value of the land and the amount of taxes 
which would accrue to the school fund. At the same time, 
the security for the leases would be vastly enlarged. In 
many cases the improvements are practically the only 
security, nor has the lessee any incentive to improve the 
property as his own improvements have the effect of rais- 
ing his rent at the next appraisement. 

Another condition which materially affects the value 
of the property is the fact that it is impossible to borrow 
money on leasehold interests in school lands, or the im- 
provements thereon, no matter how valuable such im- 
provements may be. Whatever improvements are placed 
upon such premises must be paid for in cash, and thus a 
larger investment and a greater cash outlay must be 
made than if the lessor were a private owner. The un- 
certainty of the provisions of school leases, the presence 
of the revaluation clause, and the strict provisions of 
forfeiture, all tend to lessen the value of the land and 
prevent the lessee from borrowing money on his interest. 
This also presents another reason why lessees of school 
lands cannot and do not improve their lands. 

It is also impossible for school board lessees to safely 
sub-let their premises for a term beyond the time of the 
next revaluation period unless at a fixed rental. If the 



188 

original lessee leases beyond the period of the next re- 
valuation, he must take the chance of having his rent 
increased, and perhaps be subjected to a heavy loss. He 
cannot charge the increase to the tenants, nor can he 
provide against an increase in the sub-lease to his ten- 
ants. 

These conditions make it difficult to secure the better 
class of tenants who desire long-term leases at fixed rent- 
als. The result is that men of less financial responsibility 
must be accepted, and as a consequence the rental value 
of the leased premises is materially decreased, and this 
also affects the value of the land. 



In conclusion, and as a summary of the matters dis- 
cussed in the foregoing pages, we contend that the rental 
of the property herein described should be reduced by the 
pending appraisal, for the following reasons, to-wit: 

1. The financial statements furnished show that it is 
impossible for the demised property to earn any income 
whatever if a proper allowance is made for vacancies and 
yearly depreciation of the buildings. 

2. The leases require that the rent shall be computed 
at the rate of six per cent, per annum upon the cash value. 
This was the current rate when the leases were made, but 
is now exorbitant and the lessees should be entitled to 
an equitable adjustment. 

3. The justification of a high rate of interest on ac- 
count of exemption from taxation does not now exist on 
account of the recent decision of the Supreme Court, de- 
claring that the land is taxable. 



189 

4. The limited area of the lots renders it impossible 
for the lessees to erect high, modern buildings and there- 
by increase the earning power of the property. 

5. The existence of the revaluation clauses in the 
leases prevents the tenants from making substantial im- 
provements upon the demised property. 

6. Probable changes in the system of local transpor- 
tation are likely to increase the area of the shopping 
district and make the property less valuable for retail 
purposes. 

7. The present valuation established by the appraisal 
of 1895 is excessive, having been made for a period of 
ninety years instead of ten years, as shown by the letter 
of Messrs. McLaren, Garnett & Gary. 

8. The present high values are likely to be followed by 
a period of depression such as ensued shortly after the 
appraisal of 1895, and there may or may not be a re- 
covery from the same such as that which exists at the 
present time. 

9. The numerous failures cited above of buildings lo- 
cated upon leased ground shows the danger to the lessor 
of exacting an excessive rental. 

10. The united opinion of a number of experts ad- 
vising the Committee on Buildings and Grounds of the 
Board of Education shows that the present rental is all 
that should be charged under a long-term lease without 
revaluation, hence it must be excessive for a ten-year 
period. 

11. Property available only for small retail stores can- 
not be considered as valuable as a similarly located lot 
of sufficient size as to be available as a site for a large 
department store. 



190 

12. In order to keep the present dilapidated buildings 
in a tenantable condition for the next ten years, sub- 
stantial and expensive repairs must be made, only ordi- 
nary current repairs having been made during the last 
ten years on account of the excessive rental imposed by 
the appraisal of 1895. 

Eespectfully submitted, 

Estate of R. C. Rounsavell and 

Estate of Heney Weil, 

Benjamin J. Rosenthal and 

Louis Eckstein, 

Louis M. Stumer, 

Estate of Geoege B. Jenkinson, 

A. Bishop and Company, 

Lessees. 
Levy Mayee, 

Donald L. Moeeill, 

Attorneys for Said Lessees. ' 

Reply of Boaed of Education. 

To the Honorable Board of Appraisers 

of School Fund Property of the City of Chicago. 

Gentlemen : In the matter of the lease now owned by 
the estate of R. C. Rounsavell and the estate of Henry 
Weil, both deceased, of Lot 7, being 146 State street, and 
of the lease now owned by Benjamin J. Rosenthal and 
Louis Eckstein of alley Lot 31, being 150 State street, 
and of the lease now owned by Louis M. Stumer of Lot 
32, being 152 State street, and of the lease now owned 
by the estate of George B. Jenkinson, deceased, of Lot 33, 
being 154 State street, and of the lease now owned by 
A. Bishop of Lot 34, being 156 State street, each of said 



191 

lots being in Block 142, in School Section Addition to 
Chicago, and each having a frontage of 24 feet on the 
west side of State street, between Madison and Monroe 
streets, by a depth of 120 feet, to a 15 foot alley. 

The lessees of the foregoing properties are represent- 
ed by Messrs. Levy Mayer and Donald L. Morrill, as at- 
torneys, and the statements as to each are included under 
one cover, in consequence of which we answer as to all 
under one cover, but respectfully suggest that it will be 
necessary for your honorable body to appraise the value 
of each fee separately. 

These lessees set forth at considerable length the char- 
acter of the improvements upon the ground, the income 
from the buildings (in some cases simply approximated; 
in others with an attempt to be more definite), and the 
terms of the lease. This action requires us to again urge 
to you that neither any one nor all of these items have 
any effect upon the present cash value of the fees, and 
affect alone the value of the leasehold. 

Mention is made of the possible necessity of the lessees 
paying taxes upon the various fees under the late deci- 
sion of our Supreme Court, but this again goes simply to 
the value of the various leases, and not to the value of 
the fees, but, as we have before informed you, under the 
conditions as they now exist in reference to that case, it is 
in no wise certain that the tenants will be compelled to 
pay these taxes, for a rehearing has been granted and 
what the ultimate outcome of the litigation will be cannot 
be ascertained at this time. 

Great stress is laid upon the alleged undesirability of 
these leases and the changed conditions in making leases 
which have come into vogue during the last seventeen to 



192 

twenty-five years, but as to all of this we respectfully 
suggest to you that the leases under which you act are 
fixed and their terms can in no wise be changed or modi- 
fied by you. Were you to attempt, either directly or indi- 
rectly, to alter the terms of these leases, you would be 
going far beyond your rights, exercising functions which 
in no way pertain to the duty you have accepted as ap- 
praisers of the present cash value of the respective fees. 
You must ignore the wisdom or lack of wisdom of the 
original lessees in making these leases and of all persons 
who have later become interested in them by purchase, 
and indeed it will be a most difficult task for any body of 
men to say that there was any lack of wisdom in this re- 
gard, for at all times there seem to be persons ready and 
willing to pay bonuses of goodly size to acquire the same, 
and whether this be for speculation or not, as is sug- 
gested by the lessees' statement, it is a fact, nevertheless, 
that the constant transfer of these leases under the bo- 
nus-giving conditions, demonstrates the marketability of 
the interest held under the leases and, to our mind, de- 
stroys the claim of their burdensomeness and worthless- 
ness. 

Throughout the statement of these lessees you are ask- 
ed to fix the rental of these various premises, and the 
effort is made to have you consider that it is your duty 
to settle upon the rental of these premises, but such is not 
the case. With that rental you have absolutely nothing 
to do. It is fixed positively and unchangeably by the 
terms of the leases at 6 per cent, on the cash value of the 
ground. The only variable and unascertained quantity 
to be fixed is this value of the ground, and it is for the 
purpose of so fixing it for the ensuing ten years that your 
body meets, deliberates and acts. 



193 

We do not ask for a liberal construction of these leases 
in the board's favor, nor in the lessees'. We want you to 
take into consideration everything which can throw any 
light upon the question of the value of these fees, and in 
this connection the so much talked of Clause 6 should be 
considered in so far as it can throw light upon that value, 
but so, too, under the said Clause 6, should every other 
provision in the lease be considered to the extent that it 
can throw light upon the value of the fee, but neither 
Clause 6 nor any other provision of the lease should be 
considered by you in its effect upon other matters than 
the fee value, and it is because in our opinion neither 
Clause 6 nor the other clauses of the lease have any force 
in aiding you to a proper determination of the value of 
the fee that we cited you the case of Springer v. Borden, 
reported in the 210th volume of our Supreme Court Re- 
ports, at page 518. We are not familiar with the terms of 
the lease in that case, excepting that we know it was on a 
lease with a revaluation clause such as is in these, and it 
matters not that the clauses in the lease there under con- 
sideration are clitferent from those in the leases here un- 
der consideration. It is not the facts ; it is the reasoning 
of our Supreme Court, which we claim to be of such force 
as to conclusively demonstrate that neither must the 
terms of these leases nor the character of the improve- 
ments on the premises be taken as either injuriously or 
advantageously affecting the value of the fee. Part of the 
language of the court in the Springer case is as follows : 

'^The term of the lessee and the reversion after 
the expiration of the particular estate together con- 
stituted the entire fee, and under our statute the 
grantee of the reversion would be entitled to the 
rents. Anyone buying the reversion would pay more 
if the lease called for ten per cent, per ajmumon 



194 

tlie value tlian if it called for five, as in this case, 
and wonld pay more if the lease called for five per 
cent, than if it called for four, which the evidence 
showed to be the basis for the market value of such 
estates when the cause was heard. Certainly, it 
would never be thought that a tenant must pay more 
rent by raising the value of the reversion because 
the rental fixed in his lease is high and consequently 
the reversion more valuable, and it would be equally 
unjust that he should pay less by reducing the valu- 
ation because his lease calls for a low rate and there- 
fore the reversion is less valuable. The value of 
anything, in the common understanding, is the value 
of the full title, and not a value over and above 
some encumbrance. The cash value of the lot, ex- 
clusive of the buildings and improvements thereon, 
can mean nothing else than the value of the full title 
to the lot. According to the theory of defendant, a 
lease under very favorable terras to the lessee may 
be made still more favorable to him by showing that 
the terms of the lease depreciate the value of the 
reversion. A reduction in the value of the reversion 
would be equal to a reduction of rent, and the re-, 
duction of rent would reduce the value of the rever- 
sion, and so on in endless succession. The rule con- 
tended for is wholly impractical, for the reason that 
as long as the net annual rental is imknown the net 
value of the reversion cannot be ascertained, one of 
the necessary elements for fixing such value being 
lacking. No such plan for fixing the rental could 
have been anticipated by the parties. Our conclu- 
sion is in accord with the decision in Goddard v. 
King, 40' Minn. 164, and it is supported in principle 
by Philadelphia Library Co. v. Beaumont, 39 Pa. St. 
43, and Lowe v. Brovm, 22 Ohio St. 463. The value 
of the property for the jmrpose of fixing the rents 
could neither be increased by the fact that the bur- 
den on the lessee was great and the terms of the 
lease favorable to the lessor, nor reduced by the 
fact that the burden was light and the lease favor- 
able to the lessee." 

Were it not for this reasoning and this decision, we 



195 

would most willingly enter into an exposition of the 
effect of the leases npon the values of the fees, because 
we believe that the many transfers by the lessees and 
the bonuses paid for their interests demonstrate that the 
leases are in demand as investments and that there can 
be no substantiation of a (^laim of undesirability by rea- 
son of the revaluation clause and, therefore, no injurious 
effect upon the fees because thereof, while at the same 
time, by reason of the provision for a 6% net rental, the 
very terms of the leases would seem to make the fees on 
an income basis of a value 50% in advance of fees of 
like character in the immediate vicinity not covered by 
any lease, because, and simply because, the present going 
rate for long term leases at this time is 4% in place of 
the 6% established by these leases, and we urge you, if 
you do take into consideration the terms of these leases, 
you take into consideration every term thereof, and if 
you do this we cannot but believe that you will advance 
the cash value of these fees beyond the amount which 
you will do if you fix upon their values unincumbered, 
un-burdened and unimproved. 

In the statement of these lessees you are asked to re- 
duce the rental below the various sums now paid, and, 
knowing full well that such action would be shown to be 
at the most radical variance with existing values on the 
street, which we would show in our answer, an attempt 
to destroy the etfect of these sales of all the other sites 
on the street by claiming that they were made because of 
business considerations is brought forward, but to us 
this claim is as farcical as the lessees' statement that it 
is a perilous speculation to erect high class modern build- 
ings upon leased ground ; as their allegation that it would 
probably be impossible for the Board of Education to 



196 

find tenants for these projierties were it not for the 
exigencies of retail trade and the limited territory avail- 
able for that purpose ; and as their plea that the ap- 
praiseis ignore their duty in establishing the present 
cash value of these fees because conditions might change 
in the next ten years and at the end of that time the ap- 
praisers then appointed could make a proper appraise- 
ment of value. "Were it not for business conditions, the 
exigencies of retail .trade and the limited territory avail- 
able therefor undoubtedly these fees would not be of the 
value that they now are. It is because of these 
conditions, created by the peculiar situation of these 
properties and the present conditions as to transporta- 
tion, that the values we ask for herein are just and con- 
servative. To fix upon a front foot valuation of $6,700.00 
for these properties, would be to totally ignore all ex- 
periences and all knowledge of conditions as they exist 
today. None know this better than the present lessees 
and their able counsel, and why such a request is made 
is more than we can comprehend, yet it is no more unrea- 
sonable than to request that you do not perform your 
duty in this appraisement, but leave it to your succes- 
sors ten years hence. 

These lessees set forth a letter from the appraisers of 
ten years ago, concerning certain lots in Block 142, lo- 
cated on Monroe Street. We believe, with the lessees, 
that this letter speaks for itself, and that there cannot 
be read into it something which it does not state. The 
fee to the property therein mentioned is not comparable 
with this, because conditions surrounding it are not the 
same, but the letter itself simply states that the value 
placed upon this property in 1895 should then be the 
basis for a fixed valuation for the balance of the term. 
Under their duty as appraisers, they were required at 



197 

that time to establish the cash value of that fee as of tliat 
date, free and unincumbered and cleared of improve- 
ments. Their letter says nothing about the terms of a 
lease, and it is in no way informative of what their opin- 
ions as to the proper terms of a lease upon this valua- 
tion should be. 

The allegation in the statement of these lessees, that 
men of less financial responsibility must be accepted as 
lessees of properties such as are to be here appraised, 
is not over complimentary to their clients, since in the 
early part of their statement they say that these same 
clients, the present holders of the leases, were sub-les- 
sees and purchased the various leases from their lessors. 
We wish to assure your Honorable Body, that we are 
satisfied with the financial standing of each and all of 
these lessees, and to say that we do not feel our inter- 
ests in the least jeopardized by having them as such 
lessees, and when one remembers that Messrs. Stumer, 
Eosenthal and Eckstein purchased the lease of Lots 4, 
5 and 6 in this same block, paying, as a bonus therefor, 
not because of business exigencies, but in open competi- 
tion, at a court sale, $85,000.00, and that they own lease- 
holds on other lots in this block, you will readily see that 
we are not taking any hazardous risk as to them, and 
here we wish to call your attention to the fact that, while 
these different fees are technically in separate holdings, 
yet that there is perfect harmony of action between the 
different lessees is shown by the fact that they all are 
represented by the same counsel and that three of the 
lessees are in active business partnership on the site. 
The holdings, except as to Lot 7, undoubtedly, can be 
consolidated at an}^ time, and Lot 7 itself is contiguous 
to the holdings of Messrs. Stumer, Eosenthal and Eck- 
stein of Lots 4, 5 and 6. . 



198 

These lessees make a plea for your sympathy, by in- 
ferentially suggesting that, if the actual present cash 
value of the land is gi^^en by you in your appraisement, 
it may work a confiscation of their interests. While such 
an occurrence would be impossible in any reasonable 
view of the situation, we nevertheless are constrained to 
say that even were such confiscation the necessary out- 
come of your decision upon the value of these fees, yet. 
it would be your duty to fix such values as the conditions 
in the market at this time warrant, and the question of 
the alleged hardships under the leases would not be in 
any way open for your consideration. 

It is the opinion of the Board of Education of the City 
of Chicago, that the minimum values which should be 
fixed by you in your appraisement of these lands are, 

First: As to Lot 7, ^125.00 per square foot, being 
$15,000.00 per front foot, and a total value of $360,000.00 
for the lot. 

Second: As to Lots 31 and 32, which are owned by 
Messrs. Stumer, Kosenthal & Eckstein, partners in ac- 
tive business operations at this point, Lot 31 being the 
• alley lot, and the two lots forming a single tract, the sum 
of $150.00 per square foot, being $18,000.00 per front 
foot, making a total of $864,000.00 for the two lots. 

Third: As to Lot 33, $125.00 per square foot, being 
$15,000.00 per front foot, making a total of $360,000.00 
for the lot. 

Fourth: As to Lot 34, $125.00 per square foot, being 
$15,0{)0.00 per front foot, making a total of $360,000.00 
for the lot. 

These values are based upon conditions as they now 
exist and transactions which have occurred concerning 
State Street frontages. 



199 

As a part of this statement, we ask that you take into 
consideration Exhibits A, B, C, and D, furnished with 
our answer to Mr. Crilly's statement, copies of which 
Exhibits are furnished the representatives of these 
lessees. As to Exhibit A, it will be noted that there are 
certain intermediate numbers from 1 to 59 identifying 
the different locations. We wish to state, that when we 
first caused this map to be made we had 59 separate 
transactions covering streets other than those upon 
which the properties to be appraised abut, but upon fur- 
ther consideration we deemed it more advisable to con- 
fine our illustrations to the streets in question. 

On the East side of State Street, almost directly op- 
posite the properties here in question, Mr. Otto Young 
sold to Carson, Pirie, Scott & Company his holding at 
$146.00' per square foot. The F'isher-Kranz transaction 
was at $150.00 per square foot, and the Ivraus-Mayer 
transaction was at $192.77 per square foot. The trans- 
action from Peake to Prazin & Oppenheim, adjoining 
the Palmer House, was at $144.40 per square foot, and 
the lease of the Equitable Trust Company to Paul Brauer 
of 229-31 State Street, nenr Jackson Boulevard, was at 
$126.56 per square foot. Messrs. Stumer, Rosenthal & 
Eckstein some time since paid to Otto Young $75,000. 0'O 
for the leasehold interest of Lots 31 and 32 here in- 
volved, and, as has been heretofore stated, they pur- 
chased from John J. Philbin the leasehold interest of 
Lots 4, 5 and 6 in this block, at a bonus of $85,000.00 in 
cash. These same gentlemen have taken a lease on Lots 
35, 36. 37 and 38 in this block, being the North West cor- 
ner of Monroe and State Streets, and being the identical 
property which, it is alleged, caused the bankruptcy of 
Frank Brothers, merchants, at an annual rental of 



200 

$55,000.00, or a value of $250,000.00 higher than the rate 
on which Otis, the lessee under whom Frank Brothers 
occupied the premises, had been paying, and they re- 
modeled the building situated thereon at a large expend- 
iture, and further agreed to construct a modern building 
thereon by May 1st, 1912, at a cost of over $300,000.00. 
Mr. Bishop, who claims that his lease is so burdensome, 
saw fit to pay a bonus for it a short time since, and by 
s"^b action, to our minds, defeats all force of his plea 
for the valuo requested by him. 

The lease of the property at the South West corner of 
Madison and State Streets in this block to the Otis 
family, upon which a new sixteen story building is con- 
structed, was made at a fixed value of $146.00 per square 
foot, for the entire lot. This was in February, 1902. In 
September, 1904, this family floated a bond issue of 
$400,000.00 upon this site and placed, as the value of 
this leasehold, over and above the rent payable, the sum 
of $500,000.00, making a square foot value of $250.91, 
which bond issue was entirely taken up at a premium 
ranging from seven to ten points. The fact that such a 
value could be placed upon this corner and the other 
transactions by the lessees themselves, together with the 
leases made by owners on property similarly located, 
seems to us to demonstrate conclusively that the values 
here asked for by the Board of Education are the mini- 
mum ones which should be fixed by you, 

Eespectfulty submitted, 

BoAED OF Education of the City of Chicago, 
By James Maheu and 
Angus Eoy Shannon, 

Its Attorneys. 



201 



BEQUEST OF LEVY MAYER FOR EXTENSION OF 
TIME FOR ORAL ARGUMENT. 

Chicago, May 5, 1905. 

Hon. A. N. Waterman, 

First Natio'tial Bavlc Building, 
City. 

My Deae Judge : 

Referring to the; matter of tlie appraisement of cer- 
tain school lands which is now under consideration by 
yourself and Messrs. John McLaren and William D. Ker- 
foot, I beg to confirm the conversation I had with 3"ou 
and Mr. Kerfoot over the telephone this afternoon to 
this effect: 

The time to file a reply to the answer of the School 
Board in the cases of those State Street lessors for whom 
we have appeared and filed our opening argument, ex- 
pires on the 7th inst. On account of the terrific pressure 
which now is and has been on me for several weeks, both 
day and night, as counsel for the Employers' Associa- 
tion in the present teamsters' strike, it has been and will 
be a physical impossibility to prepare and submit the 
reply on the 7th inst.. and I have therefore requested 
that in lieu of the written reply, we be given an extension 
of time expiring not later than the 21st inst., being two 
weeks from. May 7th, and during that time we are to 
be allowed to make an oral argument on a date to be 
hereafter fixed, dependent upon the engagements to 
which I have referred. T will do my utmost to make the 
oral argument as early as possible after the 7th inst., 
and will confer with you with reference to the day and 
hour. 



202 

I expressly agree for our clients that this extension 
shall in no way, directly or indirectly, prejudice the 
Board of Education, or be assigned or advanced as er- 
ror at any time or place or in any proceeding, and I fur- 
ther expressly agree, on behalf of those clients, that 
whenever rent accrues and is paid under the leases in 
the interim, the acceptance of such payment by the Board 
of Education shall not and will not in any way prejudice 
the Board. 

I have written this letter at the request of yourself and 
Mr. Kerfoot, and have stated here exactly the agreement 
which you and Mr. Kerfoot have been kind enough to as- 
sent to. 

I endeavored to reach Mr. McLaren, but was told that 
he had left the city aiid would not return until Monday, 
the 8th inst. 

If anything: that 1 have here written does not meet 
exactly with your recollection of the arrangement, I 
know that you will not ascribe it to an intentional error 
in memory, and I beg to ask that you let me know of 
such inaccuracy, though I feel confident that there is 
none. 

With many thanks for your courtesy and high assur- 
ances of my personal esteem, I am, 

Yours very truly, 

Levy Mayer. 



203 



STATEMENT IN EEBUTTAL. 



Not unmindful of the courtesy extended to me at the 
conference held last Friday, nor of the spirit of fairness 
shown by your committee, I have given much thought and 
study to the various suggestions offered, in the hope that 
so far as it lay in my power, I might be able to meet 
them all, and find a satisfactory solution in this vexa- 
tious matter. It has not been an entirely easy task, for 
reasons which I shall state, but I approached it confi- 
dently, because it has seemed to me all along that if 
landlord and tenant could be brought together in the 
spirit evidenced on Friday, that a middle ground might 
be found acceptable to both. 

Taking the matter up chronologically, therefore, I beg 
leave to submit, for your consideration, the following: 

The suggestion of your committee was that a full and 
complete settlement of the rental should be made from 
May 1, 1905, to the present date, and I shall assume, 
for the purpose of arriving at figures, that the latter is 
to be November 1, 1908, or 3'| years from the time of the 
last revaluation. This suggestion involves so niucli, in 
its relation to the whole matter, that it is difficult for me 
to accede to it, without consideration of the entire sub- 
ject, even for a tentative proposition: 

Because, the valuation placed by the appraisers, per 
front foot, on the property is excessive, and not 
in accord with what five prominent real estate 
men of the City of Chicago, employed by your 
Honorable Board only a short time before the ap- 



204 

praisers valued the property, gave as their esti- 
mate of its value ; 

Because, the rate of interest is excessive, and not in 
accord with transactions of a similar character, 
made by private individuals on similar property; 
and finally 

Because, the appraisers themselves have expressed in- 
dividual opinions, that on the valuation of 1905 
a rate of interest of 5% should be used for a final 
revaluation under the terms of the lease. 

And yet, approaching the subject with an earnest de- 
sire to meet the views of your committee in this regard, 
I have undertaken to do so, with the single condition that 
it shall be without prejudice to any matter now pending 
or hereafter to come up. I shall confine myself to Lot 
31 in the presentation of figures, assuming that the 
same argument and the same figures, in their relative 
proportions, on the valuations heretofore established, 
will cover Lot 32, the former leasehold being owned by 
Benjamin J. Rosenthal and Louis Eckstein, and the lat- 
ter by Louis M. Stumer. In the appraisal Lot 31 and 
Lot 32 were appraised as one, at a valuation of $636,- 
000.00. and in our discussion of last Friday your com- 
mittee separated the two, using the figures $324,000.00 
on Lot 31, and $312,000.00 on Lot 32. Taking Lot 31, 
therefore, on a valuation of $324,000.00, and a 6% basis, 
we arrive at the figures of $19,440.00 per annum. The 
disputed rental on this lot is $9,900'.00 per annum. Lot 
32, on a valuation of $312,000.00, and a basis of 6%, 
would establish a rental of $18,720.00 per annum, the 
disputed rental on this lot being $9,000.00. This makes 
the total of proposed rental $28,160,00, or a difference of 
$19,260.00 per annum between the disputed and proposed 



205 

rentals, which, for a period of 3i years, would require us 
jointly to pay on November 1, 1908, to the Board of Edu- 
cation the substantial sum of $67,410.00 on the two lots, 
to meet the condition of your committee, preliminary to 
further negotiatiojis. 

Assuming, therefore, that we should acquiesce in the 
suggestion oifered, the rental would be established for 
3^ years from May 1, 1905, at $19,440.00 for Lot 31 and 
$18,720.00 for Lot 32. 

We have now to deal with the period from November 
1, 1908, on. It has l)een my contention that the valua- 
tion made by the five real estate men selected by the 
Board of Education, a little more than one year before 
the revaluation, was fair and reasonable for a 99-year 
lease, without revaluation, and that their basis of valua- 
tion— $11,000'.0() to $12,000.00 per front foot on Lots 31 
and 32 — and an interest rate of between 4% and 5%, 
recommended by them, should be used in determining the 
rental for the full term of the existing leases, without re- 
valuation. Indeed, in the proceedings of the Buildings 
and Grounds Committee at about this time, will be found 
the following: 

Mr, Plamondon moved that a lease be offered to 
the lessees above named for Lot 31, Block 142, for 
the sum. of $15,600.00. (This refers to a straight 99 
year lease without revaluation.) Seconded by Mr. 
Downey, This motion was carried. 

This was clearly the result of the recommendation of 
the five real estate men employed by the Board of Edu- 
cation heretofore referred to. In 1905 the appraisers 
established the value of $63,600.00 on Lots 31 and 32. 
Dividing the valuation in accordance with the suggestion 
of your committee, for the purjjose of this argument— 



206 

$324,000.00 on Lot 3]. and $312,000.00 on Lot 32— this 
valuation establishes a price approximately $13,500.00 
per front foot, or nearly $2,000.00 more per front foot 
than the appraisal of the year before, and this for a ten 
year period. 

If the appraisers established $324,000.00 as the full 
fair cash value of the property, then, under ordinary cir- 
cumstances, and taking as a basis, leases of this character 
made between private individuals, a 4% rate should 
be used. But the Board contends that there are no taxes 
on the land in Block 142. This being true, it is argued 
that an addition of 1% should be allowed on account of 
this advantage. I shall concede this here, but want to 
digress a moment, to place before you a phase of the sit- 
uation that should not be overlooked: Is the Board of 
Education entitled to the full 1% on account of taxes? 
As a matter of fact, the schools receive from the South 
Town, as school taxes, 2-61/100%, or only one-third of 
the taxes collected. As I tigure it out, if the rate of in- 
terest on a full fair cash value of the property Avere 4|%, 
the Board of Education would receive as much money as 
if taxes vv^ere paid on the land. Nevertheless, we shall 
pass this also, and concede, for the purpose of this argu- 
ment, that the Board should receive 5% on the cash value 
of the land, as determined by the appraisers in 1905, thus 
establishing a rental of $16,200.00, by the simple chang- 
ing of the rate of interest from 6% to 5%. It is this in- 
considerable difference, more than anything else, that 
has brought me to the conclusion that a middle ground 
could be found. 

I call attention here also to the circumstance that the 
Buildings and Grounds Committee, after the trial in the 
Circuit Court, on the suggestion of Judge Windes, met 



207 

with us to adjust the matter in dispute, and made a ten- 
tative proposition of a rental of $16,500.00' on Lot 31, 
which was at the time rejected. This should be borne in 
mind in connection with the requirement of your commit- 
tee to pay the rental on the appraisal of 1905 in full for 
3^ years, as it involves the greater part of the payment 
of the $67,410.00, to be made on Lots 31 and 32, for the 
purpose of these negotiations. 

Acting on the suggestion of the members of your com- 
mittee, to work out a plan that will provide for the pay- 
ment of the proposed rental of 1905 for 3^ years, I have 
established the following as a tentative rental propo- 
sition : 

3^ years from Mav 1, 1905 to November 1, 

"1908, on Lot 31"' $19,440.00 

16^ years from November 1, 1908, to May 

i, 1925 16,375.00 

Being more than 5% on the appraised 
value of 1905. 
20 years from May 1, 1925, to May 1, 1945 17,325.00 

Being an increase of 5%, or $675.00 per 
front foot, on the appraised value of the 
land in 1905. 
20 years from May 1,1945, to May 1,1965. ., 18,191.25 

Being an increase of 5^o, or $708.75, per 
front foot, over the preceding figures. 
And for the balance of the term 19,100.81 

Being a still further and third increase 
of 5%, or $744.18. per front foot, over the 
immediately preceding amount. 

This proposition, it will be observed, pays the full ren- 
tal, as claimed to have been established by the appraisers 
in 1905, to date : provides for an increase in valuation at 
intervals throughout the period of the lease, as sug- 
gested by your committee; accepts the appraisers' full, 
fair cash value, as established in 1905 ; and provides for 



208 

a little more in the 16 J years than 5% ; and it seems to 
me meets the general plan discussed. The proposition 
carries with it an agreement to erect npon the premises 
a fire-proof steel-constructed building, of not less than 
six stories, with adequate foundations for at least an 
eight-story bailding, the building operations to com- 
mence not later than May 1, 1916, and an abatement of 
the rental for a period not to exceed six months while 
building: the building to be maintained throughout the 
period of the lease in the highest state of efficiency, and 
the lease to contain such reasonable and fair provisions 
of protection for both parties as are customary in such 
contracts. 

I want to ask the indulgence of your committee for 
having presented the matter in this manner. I really 
could not see any other way of doing it. Merely to have 
presented figures would undoubtedly have necessitated a 
further conference to explain how^ tliey were arrived at, 
and I have undertaken to do this in this memoranda. 

All of which is respectfully submitted. 

Levy Mayek. 

STATEMENT OF C. W. LASKER. 

Chicago, April 12th, 1905. 
Messrs. John McLaren, 

Arha N. Waterman, 

and William D. Kerfoot, 

Appraisers of School Fund Property. 
Gentlemen : 

I acknowledge receipt of your notice of the 24th ult., 
informing me of your appointment as appraisers of schoo] 
fund property and of your meetings as such appraisers. 



209 

After a full consideration of the matter, I have concluded 
not to present any formal statement to you relating to 
the property of which I am the lessee, for the following 
reasons : 

(1) I am* advised that the appointment of some or 
all of you have not been in conformity with the leases 
in question, and that therefore any appraisal made by 
you will be invalid, and wish to reserve to myself all 
right of exception to any appraisal which may be made 
by you. 

(2) Under the appraisal of 1895, the value of the prop- 
erty in question was fixed at the sum of $1,000 per front 
foot, which was a full valuation for the period of ninety- 
nine years, as shown by the letter of Messrs. McLaren, 
Garnett & Cary, presented to the Board of Education in 
connection with the application of the Gore and Boomer 
estates for a waiver of the revaluation clause. 

(3) The Board of Education, by its own act in grant- 
ing a ninety-nine year leas.e of the adjoining property at 
a valuation of $1,000 per front foot on a five per cent, 
basis, has admitted that the valuation placed upon my 
property in 1895 was excessive for a ten year term. 

(5) The rents received by me from this property dur- 
ing the past ten years have been insufficient to pay the 
fixed charges, consisting of ground rent, taxes, insur- 
ance and repairs, and therefore any financial statement 
which I might present will show only a deficit, and I do 
not care to make public the amount of my los.ses in con- 
nection with this property. 

(6) Any citation which I might make of other sales 
or leases would be irrelevant in my opinion, as the action 
of the Board of Education in leasing the adjoining prop- 



210 

erty and the letter of the 1895 appraisers, above referred 
to, show conclusively that the valuation of 1895 was ex- 
cessive. 

Under these circumstances, it will be impossible for 

me to acquiesce in the payment of any increased rental, 

and, in all fairness to me, the Board of Education should 

waive the revaluation clause, or consent to a reduction 

of my rental. 

Respectfully submitted, 

C. W. Lasher. 

REPLY OF BOARD OF EDUCATION TO STATE- 
MENT OF C. W. LASHER. 

To the Honorable Board of Appraisers 

of Schol Fund Property, 

of the City of Chicago. 
Gentlemen : — 

In the matter of the lease of Charles W. Lasher from 
the Board of Education of the City of Chicago of the 
property situated at No. 332 South Clark Street, size 25 
by 105 feet to a 10 foot private alley, being described as 
the south half of Lot 10 in Block 113 in School Section 
Addition to Chicago. 

This less.ee in the same statement first protests that 
your Honorable Body has no jurisdiction wherewith to 
appraise his leasehold, and then sets forth reasons which 
appeal to him as a foundation for you, as appraisers, to 
fix upon the value of $1,000.00 per front foot for the fee 
of the land held under lease by him. 

We are of the opinion that the value of the land here 
involved should be fixed by you at $1,500.00 a front foot. 



211 

or $15.00 a square foot. Facts throwing light upon the 
advance of this property are as follows : 

Clark Street generally is coming into demand for high 
class business purposes, and within the last few years 
has seen as great a proportionate advance in value as 
any down town street. The character of the improve- 
ments lately constructed upon it and to be constructed 
thereon is of the very best. In January, 1901, when 
Rand, McNally & Company took the 100 feet adjacent 
to this site on a basis of $12.50 a square foot at the 4% 
going rate, they also obtained the 50 by 100 feet on the 
corner of Harrison and Clark Streets, adjoining the same 
100 feet, at $18.75 a square foot, also, the 50 feet on 
the North East corner of Pacific Avenue and Harrison 
Street at $9.37 a square foot, and the adjoining 150 feet 
on Pacific Avenue, inside at $6.25 a square foot. In the 
following year these same people asked for more space 
on Pacific Avenue, and obtained an additional 100 feet, 
but at a value of $11.40 a square foot aside from paying 
a bonus to John Mackin. The fact of this advance, 
coupled with the proposed construction of new buildings 
at a cost of from $400,000.00 to $1,000,000.00, which Rand, 
McNally & Company agreed in their lease to erect, has 
materially advanced the value of the fee of land of this 
character. 

Since 1902, the date of these transactions, Mr. James 
E. Patten has put a million dollars into land on Sher- 
man Street and a million more in buildings just one block 
west, which has given an additional value to this locality. 

Samuel Bingham's Sons have purchased 225 feet on 
Sherman Street for the erection of an excellent building 
for their Printers' Rollers business. 



212 

On Clark Street, about two years ago, Charles B. King 
finished a fine seven story building two doors north of 
Harrison Street for the occupancy of high class litho- 
graphers and at the north end of the block at Van Buren 
Street, Owen Aldis constructed a modern, fireproof build- 
ing for the occupancy of Weber's Department Store, de- 
stroying old buildings and saloon and low grade tenan- 
cies by so doing, all of which has the effect of advancing 
the value of this fee, and we deem a $1,500.00 appraise- 
ment per front foot to be as low a one as could be estab- 
lished. 

Respectfully submitted. 

Board or Education op the City of Chicago, 
By James Maher and 

Angus Roy Shannon, 

it 

Its Attorneys. 

JACOB L. KESNER LEASE. 
Statement of Board of Education. 

To the Honorable Board of Appraisers 

of School Fund Property, 

of the City of Chicago. 
Gentlemen :^— 

In the matter of the lease of Jacob L. Kessner from 
the Board of Education of the City of Chicago of the 
property situated at No, 136 State Street, described as 
Lot 3 in Block 142 in School Section Addition to Chi- 
cago, having a frontage of 24 feet on the west side of 
State Street, between Madison and Monroe Streets, by 
a depth of 120 feet, to a 15 foot alley. 

The lessee of this property has not seen fit to file a 



213 

statement with you, and, inasmuch as this lot is atfected 
in general by the same circumstances which affect the 
other lots in the block represented by Messrs. Mayer and 
Morrill, we will not present an extended argument, car- 
ing only to give you our reasons for the advance in value 
over the other inside lots which we believe this fee is 
entitled to. 

Our opinion of the value of this feet is $175.00 per 
square foot, being $21,000 per front foot, making a total 
of $504,000.00 for the land. 

This lot lies 48 feet from the corner of State and Madi- 
son Street, the most prominent corner in this City, while 
to the south of this lot is the holding of Messrs. Stumer, 
Rosenthal & Eckstein. It is fortunate in being pocketed, 
s.o to speak, at this point, thus giving it the same en- 
hanced land value that is so often given to other pieces 
of property because of what is known as business ex- 
igencies. That the advance of $50.00 per square foot 
which we ask for over the other inside lots in this block 
is warranted by conditions, we cite you the small tract 
of 20 by 40 feet known as the Old Inter Ocean Site, at, 
the North West corner of Madis.on and Dearborn Streets, 
which has a valuation of $250.00 a square foot, while the 
L shaped piece of property of Haskell, abutting the cor- 
ner site on the West and North, has a value of $77.00 a 
square foot, while just a few feet to the West thereof, on 
Madison Street, the Freer property has a value of but 
$30.00 a square foot, and we also call your attention to 
the values on Madison Street, at the South East corner 
of Wabash Avenue, lately established by the Catholic 
Bishop of Chicago, and the quick fall of values on Madi- 
son Street directly to the East thereof. 



214 

We believe that, upon a due consideration of the con- 
ditions of this lot, you will appreciate the reason for the 
value asked by the Board of Education, and we request 
that you fix the same upon the basis suggested. 

Respectfully submitted, 

Board or Education of the City of Chicago, 
By James Maher and 

Angus Roy Shannon, 

Its Attorneys. 

ROSALIE CAVANNA. 

Statement in Behalf of H. 0. Stone & Co. 

Chicago, 111., Mar. 28th, 1905. 

Mr. John McLaren, 
Mr. A. N. Waterman, 
Mr. W. D. Kerfoot, 

Appraisers. 

Gentlemen :— 

In view of the wish you gentlemen expressed at the 
meeting in Judge Waterman's office yesterday that les- 
sees act promptly in presenting their side of the case 
so that appraisals can be reached without unnecessary 
delay, we beg to submit on behalf of Mrs. Cavanna, les- 
see of No. 148 State St., the following statement: — 

Rentals of 148 State St. 

Store, one tenant $10,000 per yr. 

2nd floor, one tenant 2,100 per yr. 

3rd & 4th floors, one tenant .... 4,000 per yr. 

5th floor, two tenants 1,200 per yr. 

6th floor, one tenant 900 per yr. 

$18,200.00 



215 

Deduct for average vacancies 
and loss of rentals tlirougli 
occasional failure of tenants, 
10% 1,820.00 



$16,380.00 



Expenses. 

Ground rent $10,200. 00 per yr. 

Taxes (1904) 613.54 

Insurance 650.00 per yr. 

Repairs 645.00 per yr. 

Fuel 178.00 per yr. 

Gras for halls 113.00 per yr. 

Water tax 36.50 per yr. 

Electric power for elevator. 300.00 per yr. 

Janitor and elevator man . . . 780.00 per yr. 

Agent's commission 5%.... 819.00 per yr. 

Total annual expenses . . . $14,335.04 



$ 2,044.96 



The principal profit has been derived by an agreement 
whereby McVicker's Theatre has paid for years past 
one4ialf ($5,100) of the ground rent for the use of the 
rear end of the lot for a power house. This agreement 
expires May 1st next and the theatre will not renew it at 
any price, as they have arranged to get heat and light 
elsewhere. The best offer we have been able to get for 
the building which the theatre will leave on the rear 
end of this lot is $1,200 per year for a candy factory. This 
means a probable loss in revenue after May 1st of $3,900 
per year. We must also heat the rear building here- 
after, which will cost $100 more for extra fuel. The elec- 
tric passenger elevator in the front building has been 
operated for years under a very favorable contract for 
power at a fixed rate of $300 per year. This contract also 



216 

expires May 1st next, and the Edison Co. refuse to fur- 
nish power after that date, except at regular meter rates, 
which will s-urely add $200 per year to cost of operation. 
These three items alone amount to a loss of $4,200 per 
year, which must be faced after May 1st. 

The problem after May 1st is not how much profit the 
leasehold will produce, but how much the loss will be. 

The front building contains one store and five floors, 
rented to various tenants. All leases expire April 30th 
next. The tenants of the store, 2nd and 4th floors, will 
then vacate and other tenants must be procured. 

The building (size 24x90), being only 90 feet deep, the 
store and floors will not bring as high prices as in neigh- 
boring buildings which are deeper. The lease allows 
you to take the building upon each lot into consideration 
in fixing the rental. 

Another reason why this building will not produce as 
much rental as other buildings in this block is, because 
it has a narrow frontage on the corner of an alley. It 
is a mistaken idea to assume, and has been done in the 
past, that this lot can afford to pay a higher rental than 
inside lots. It is true that the extra light from the win- 
dows on the alley help the upper floors, but this advan- 
tage is more than offset by the disadvantage to the store, 
and it is to the store that we must look for the larger 
half of the revenue. You are probably aware that the 
class of people who patronize the stores on the west 
side of State Street differs from the class of peo- 
ple on the east side of the street. The chief value of a 
store on the west side of the street lies in the ability of 
the show-window to catch the eye of the passer-by. When 
people cross an alley where a step must be taken down 



217 

or up and teams avoided, their attention is diverted tem- 
porarily from tlie show-windows. The show-windiDW at 
148 State, being only 17 feet wide (entrance to upper 
floors uses up balance of the frontage) and located right 
on the alley, is never noticed by many pass.ers-by. For 
verification of this peculiar fact, we refer you to the 
present tenants who are to move elsewhere, partly be- 
cause of this very fact. This criticism was also made 
by Mr. B. Baumgarden of 145 State St., who was for- 
merly a tenant of the store. 

We believe you gentlemen are familiar with the re- 
stricted possibilities of a 24 ft. lot as. compared with 48 
or 72 feet more. The space has not the rental value per 
square foot of a larger area. Further, the cost of oper- 
ating a 24 ft. building is more in proportion than a larger 
building. 

Your attention, will, no doubt, be called to high prices 
recently paid for State Street property. Kindly bear in 
mind that only large enterprises can pay such prices. 
The big dry goods and department stores have absorbed 
s.o many lines of business that there are only a few lines 
left which can be conducted in small stores on State 
Street at a profit. About the only lines of business where 
we can seek for a tenant for this store are shoes, candy, 
millinery, jewelry and cloaks. 

We do not know what to say about the recent court de- 
cision to the etfect that lessees of School property mus.t 
hereafter pay taxes on the land, but if this is so, you 
gentlemen will, no doubt, take the taxes into considera- 
tion in fixing the rental. We do not believe that you 
would wish to fix a ground rental that will result in an 
annual loss to the lessee, nor do we believe it is contem- 
plated in the leases.. 



218 

We trust that the appraisal will be fixed at once. Mrs, 
Cavanna, who is now here, gladly waives the balance of 
the twenty days' time to which she is entitled, as she is 
very desirous to have the matter settled. 

Mrs. Cavanna is not speculating in the property. She 
has been the lessee since 1863. She is a widow and an 
old lady. This property is her principal source of in- 
come. She now lives in Europe because her children 
reside there and her expenses are less when living with 
them. She lived in Chicago from 1857 to 1880, during 
which years she was engaged in repairing and dealing 
in lace, and earned with her own hands the money that 
went into the building 148 State St. It represents her 
savings. We bespeak for her your most careful consid- 
eration. 

Respectfully, 

H. 0. Stone & Co., 

Agents. 

Supplemental Statement. 

Mr. John McLaren, 
Mr. A. N. Waterman, 
Mr. W. D. Kereoot, 

Appraisers. 

Gentlemen : — 

We beg to add to our letter of March 28th the follow- 
ing: 

We had a talk Saturday with Mr. Henry Friend, a 
merchant of 154 State St., who occupied the store 148 
State for a period of years. He says he found that the 
fact of this narrow store being located right on the cor- 
ner of the alley was a great detriment and that he knows 



219 

from personal observation that the bulk of the people 
pass by without noticing the show-window. 

He s.ays he had his show-window filled with the same 
goods, marked at the same prices, as the goods that filled 
a window a few doors north and that the store corner of 
the alley lost money while the other store made money, 
simply because of the difference in location of the two 
show-windows. 

Says he will willingly appear before you gentlemen at 
any time, if you desire, to explain to you the difference 
in the value of such locations for retailing merchandise. 
He has had 16 years' experience on State Street and is. 
a successful merchant. 

Mr. B. Baumgarden, another successful State Street 
merchant, who once occupied this store, will likewise ap- 
pear, if you wish. 

Respectfully, 

H. 0. Stone & Ca 

REPLY OF BOARD OF EDUCATION TO STATE- 
MENT IN BEHALF ROSALIE CAVANNA. 

To the Honorable Board of Appraisers 

of School Fund Property, 

of the City of Chicago. 
Gentlemen : — 

In the matter of the lease held by Rosalie Cavanna 
from the Board of Education of the City of Chicago of 
the property situated at No. 148 State Street, on the 
northwest corner of the alley, between Madison and Mon- 
roe Streets., in size 24 by 120 feet, with a 15 foot alley 
abutting its south side, described as Lot 8 in Block 142 



220 

in School Section Addition to Chicago, in Cook County, 
Illinois. 

In the statement presented by H. 0. Stone & Company 
on behalf of the lessee, the question of the earning ca- 
pacity of the improvements on the property comprises 
the larger part of the argument, and yet in that state- 
ment it is shown that the rear 30 feet of the premises, 
that part having no street frontage and facing only upon 
the two alleys are leased to the McVicker Theater Com- 
pany for the sum of $5,100.00 per year, that amount be- 
ing exactly one-half of the total ground rent of the entire 
premises under the present appraised value of the fee. 
That value, which was fixed in 1895, is $170,000.00 and pro- 
duces a rent of $11,200.00 per year. This, on the 4% rate, 
establishes a square foot value of $88.50. 

On the basis of the argument made by H. 0. Stone & 
Company in the showing of the rent paid by the McVicker 
Theatre Company it appears on mere arithmetical pro- 
portions that at the time the McVicker Theatre Com- 
pany's sub-leas.e was made, the rent of the entire lot 
should have been at least $15,300.00 per year, assuming 
that all parts of the lot had a like frontage with the 30 
feet leased to the McVicker Theatre Company, but when 
it is remembered that the part not so leased consists of 
that having a frontage on State Street, it will readily be 
appreciated that a very much higher rental value ex- 
isted as to this fee than the said $15,300.00. 

In the lessee's, argument two main questions are raised 
as injuriously affecting the value of this fee; first, the 
size thereof, and second, the fact that it abuts upon an 
alley. As to the latter, we deem the argument so spe- 
cious as to need no refutation and will not dignify it by 
making any response thereto. As to the former, we de- 



221 

sire to call attention to the many small pieces on State 
Street, in the near vicinity of the site in question, which 
conclusively establish that small sites on that thorough- 
fare command high values. 

159 State Street, almost directly opposite, was, on July 
1, 1902, leased by Frederick Fischer to John Kranz for 
99 years, on a square foot value of $150.00. This site has 
no side light, there being no alley abutting it, and is of 
a size of but 20 by 83 feet. 

No. 155 State Street was. leased on August 11, 1903, 
for 99 years by Adolf Kraus to David Mayer, at a square 
foot value of $192.77. 

In November, 1904, C. W. Partridge leased to Charles 
Neteher a site 46 by 105 feet on State Street, at the cor- 
ner of the alley just north of Madison Street, at a square 
foot value of $258.00. 

In July, 1904, at 187 State Street, the tract 26 by 147 
feet just south of the Palmer House was leased to Frazin 
and Oppenheim for 99 years, on a basis of $144.70 a 
square foot, and the tract 23 by 80 feet at the South West 
corner of Adams and State Streets, was leased, in May, 
1902, from Starkweather to the Frazin Shoe Company, 
on a basis of $269.00 a square foot. 

The foregoing list of transactions seems to us to con- 
clusively demonstrate that the minimum value of this 
property to-day is $150.00^ a square foot, or a total of 
$432,000.00'. 

The argument of the lessee as to the character and 
condition of the improvements located on this site, we 
urge, has absolutely no relevancy to the issue before you, 
to-wit, the value of the fee. Buildings, far more valuable 
than this one in question, have been razed to the ground 



222 

time and again in this City, and the income from such 
buildings, we urge, necessarily tends to show only the 
present value of the leasehold, as such, and in fact, does, 
not even demonstrate what that leasehold may be worth 
in the open market, because of the fact that additional 
improvements or a possible different scheme of manage- 
ment might enhance materially the income derived there- 
from. 

To show that the buildings have no appreciable effect 
upon the value of the fee, we wish to call attention to the 
holdings by Mr. Marshall Field, who, on the North East 
corner of Madison and State Streets, secured a large 
rental upon a substantial building situated thereon. Sev- 
eral years ago, the Mandels induced Mr. C. D. Peacock 
to negotiate for that corner on a ground lease. Mr. Field 
stated without hesitancy, that unless he secured a larger 
ground rent than the building then netted him, he would 
not consider the proposition. Mr. Peacock acquiesced 
in such a rental, and the lease was made. The Mandels 
then remodeled the building completely, under-pinning it 
and reconstructing it throughout, besides adding three 
stories thereto. 

The Old Republic Building, at 159 La Salle Street, 
netted, under the bes.t circumstances, between $44,000.00 
and $45,000.00 per year, and yet a lease was made on 
that property for the ground alone for $50,000.00 per 
year. These two cases, as is the situation covering all 
of the other cases mentioned in this statement, must be 
understood as being in addition to the payment of taxes, 
in each illustration the lessee assuming the payment of 
the taxes, and we urge here, as we have heretofore in 
replying to other lessees, that the question of the payment 
of taxes is one concerning the leasehold value alone. 



223 

One further point is made by Messrs. H. 0. Stone & 
Company. It is, that small shops, cannot succeed in quar- 
ters the size of this site, but this is disproved by the lease 
made by David Mayer to a cloak company of the site 155 
State Street, across therefrom, at $192.77 a square foot, 
and by the further fact that small dealers, not only in 
the lines spoken of by the lessee, but in every conceivable 
line of business conducted in a large city, are seeking 
locations in the exact territory of which this lot is a part. 
This is established by the fact that the Stewart Build- 
ing, at the corner of State and Washington Streets, is 
almost entirely filled by jewelers, cloak dealers and other 
small businesses. The Champlain Building, before Mr. 
Netcher secured it, was filled throughout its entire 14 
stories with small shops of all kinds. The new Otis Build- 
ing, at the corner of Madison and State Streets, is rented 
largely for small shops and is paying on a square foot 
value of $250.00 for the land. Stumer and Rosenthal, on 
their lease from the Board of Education, on the corner 
of Monroe and State Streets, in their remodeled build- 
ing, have the same class of occupancy. The Republic 
Building, at the South East corner of Adams and State 
Streets, constructed by one of the closest students of 
the State Street trade, and one of the ablest men in Chi- 
cago in the Real Estate line, namely. General Strong, is 
being devoted throughout its entire 12 floors to small 
shops. 

It is a matter of common knowledge that there are more 
people on State Street every day, between Van Buren 
and Randolph Streets,, than on any other like stretch of 
street in any other large city in the world, and State 
Street at this point is in the center of the great union 
loop dstrict with the facility of bringing the greatest 



224 

possible concourse of people into one section for the pur- 
pose of transacting business. The business which is most 
favorably affected by this condition is. the retail store 
business. The entire street will never be taken by single 
mammoth concerns, block for block, and there is always 
occupancy to be had for small buildings for the sale of 
specialties. Competition for space is always brisk on 
State Street, with the factor added of common knowledge 
of the large concerns which are compelled to build 
through to Wabash Avenue and Dearborn Street to get 
requisite space. State Street was never in as well found- 
ed and substantial a condition as to values as it is to-day. 

We respectfully ask your Honorable Body to fix, as the 
appraised value of this lot, the sum of $150.00 a square 
foot, or a total value of $432,000.00. 

EespectfuUy submitted. 

Board or Education of the City of Chicago, 
By James Maher and 
Angus Roy Shannon, 

Its Attorneys. 

STATEMENT IN REBUTTAL. 

Chicago, 111., U. S. A., April 27/05. 
Mr. John McLaren, 
Mr. A. N. Waterman, 
Mr. W. D. Kerfoot, 

Appraisers. 

In Re 148 State Street, Rosalie Cavanna, Lessee. 

Gentlemen : — 

The argument of the attorneys for the Board of Edu- 
cation that the payment by the McVicker Theatre Com- 



225 

pany of $5,100 per year for the rear portion of the lot 
indicates what the ground rental should be for the whole 
lot, loses its force when attention is called to the fact 
that the agreement to pay half the total ground rental 
was entered into by Mr. McVicker over twenty years ago, 
when the ground rental on the entire lot was only $2,376 
per year making his share (one-half) $1,188 per year. 
Mr. McVicker did not then foresee the great rise in the 
ground rental which has taken place, and this agreement 
has proven a burden upon his. estate. It is a great relief 
to his heirs and assigns that tlie agreement expires with- 
in a few days. 

To corroborate the above we send you imder separate 
cover the original agreement, dated January 26th, 1885, 
drawn up in Mr. McVicker 's hand writing and signed by 
him. 

We wish also to correct the statement made by attor- 
neys Maher and Shannon that the above lot now produces 
a ground rental of $11,200 per year ; the rental now paid 
by Mrs. Cavanna under the last revaluation is $10,200 
per year. 

We pres.ume that if you gentlemen are not satisfied 
with our assertion as agents of the building that we have 
found it is a detriment to tliis narrow store to be located 
on the corner of an alley on this crowded street where 
there is an almost continual jam of pedestrians and 
teams during business hours, you will give us an oppor- 
tunity to bring before you all or at least s.ome of the 
merchants who have occupied this store during the past 
ten or twenty years in order that they may relate their 
experience and explain to you why this store is not as 
valuable from a rental standpoint as a store of similar 
size located a short distance from the alley. The attor- 



226 

neys for the Board of Education can be present and 
cross-question these merchants if they desire. 

The five State Street leases made during 190'2, 1903 
and 1904 referred to by attorneys Maher and Shannon 
are all straight Ninety-Nine year leases without revalua- 
tions. They have not in a single instance cited a lease 
with a revaluation clause. All the leases cited except 
the Netcher lease and the corner of State and Adams 
are on the east side of the street which is the more valu- 
able side. Furthermore, in most of the cases cited we 
believe that the lessee owned or controlled adjoining 
property and hence by combining holdings could afford 
to pay higher prices than the lots were actually worth if 
considered independently, for instance : Mr. John Kranz 
already owned the property adjoining 159 State Street 
when he acquired the latter, and Mr. David Mayer con- 
trolled the property adjoining 155 State Street before 
he acquired the latter. In the Netcher case the entire 
half block on State, Madison and Dearborn had been ac- 
quired by purchase or lease except the 46 feet belonging 
to Mr. Partridge, and it is plain to see why the Netchers 
were obliged to pay most any price that was demanded 
to complete the site of the Boston Store. 

The point made by Maher and Shannon that there are 
many small shops, located on the upper floors of several 
prominent State Street Buildings bears out our conten- 
tion that the big department stores and high rentals have 
forced the small shops out of the stores on the street 
level. 

We object most seriously to the argument of attorneys 
Maher and Shannon wherein they urge that the char- 
acter and earning capacity of the improvements should 



227 

not be taken into consideration. We respectfully call 
yonr attention to the sixth clause in the supplemental 
lease ; it is as follows : 

"Sixth : That, notwithstanding anything in said lease, 
contained, the appraisers shall be at liberty in forming 
their judgment of the value of the land, without includ- 
ing the value of the improvements thereon, to take into 
consideration, if and so far as they deem it pertinent to 
do so, the improvements on s.uch lands, and the charac- 
ter, condition, value, cost, rental, expenses and other 
particulars thereof, and any other facts or information, 
from whatever source, bearing upon the question of the 
actual value of said land ; and it shall be the duty of the 
lessee to furnish the appraisers promptly, on request, 
a statement showing the rental receipts and disburse- 
ments on account of said improvements for five years, 
as near as may be, next proceeding the time of the 
appraisment. ' ' 

It is the LAST of the Clauses containing instructions 
to the appraisers regarding what facts may be taken into 
consideration in arriving at a value, and we contend 
that one of the chief purposes, for which this Clause was 
inserted was to protect the lessee, and we believe you 
are bound to take into consideration so far as it is per- 
tinent "the improvements on such land, and the charac- 
ter, condition, value, cost, rental, expenses and other 
particulars thereof," and make an appraisement which 
will fix the ground rental within the earning capacity of 
the improvements after allowing the leasee a fair return 
on the sum she has invested in said improvements. 

• If the ground rental should be fixed at a sum which 
would equal 4% on $432,000 the value asked by attorneys 
Maher and Shannon, and such an appraisement should be 



228 

upheld by the Courts, it would probably simply mean 
confiscation of all the lessee has invested in improve- 
ments, etc. 

Mrs. Cavanna, the lessee, has not been remiss in pro- 
viding suitable improvements for the lot ; she has rebuilt 
entirely, and has remodeled and added various improve- 
ments from time to time ; the building now contains the 
most modern kind of store front, also passenger elevator, 
steam heat, etc. Two stories were added a few years 
ago and the walls will not now carry additional stories, 
hence the earning capacity cannot be increased in this 
manner, mrs. cavanista has provided as good improve- 
ments AS ANY lessee COULD AFFORD UNDER THE LEASE SHE 

holds — ^which you must bear in mind is a lease with re- 
valuation every ten years — an uncertain quantity. 

Mrs. Cavanna has faithfully performed her part of 
the contract as lessee for forty two years — since 1863, 
and we think you will agree with us that she is entitled 
to a fair return on her savings which she has invested in 
this building. 

From all the conversations we have had with repre- 
sentatives of both sides who were present when the s,up- 
plemental leases, bearing date June 15, 1888, were agreed 
upon, we understand that a spirit of fairness ruled at that 
time, and the protection which it was intended the Sixth 
clause should give emanated from a desire on the part of 
the Board of Education and all concerned ''To live and 
let live," and we do not believe you gentlemen forming 
the Board of Appraisers will deviate from that broad 

principle. 

Respectfully, 

H. 0. Stone & Co. 



229 



CHARLES H. BLAIR. 

Statement in Behalf of Charles H. Blair by H. E. 
McCall, Attorney in Fact. 

Office of 

Charles H. Blair, 

175 Dearborn St. 

Chicago, March 25, 1905. 

To the Board of Appraisers of School Fund Lands, for 
1905. 

Gentlemen : 

Charles H. Blair is lessee of Lots 2, 3, 4, 5, 6, 7, 8, 9, 
and 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, in Block One (1) 
of School Section Addition to Chicago, known as numbers 
166 to 184 Wes.t Madison Street and numbers 80 to 100 
South Halsted Street. 

Mr. Blair has been critically ill since November last, 
and from that time he has been unable to give attention 
or thought to any of his business affairs. He is, at the 
present time, and has been for several weeks, out of the 
city owing to ill health. 

I have acted, in the service of Mr. Blair as his real 
estate agent, since 1897, and, since the commencement of 
his present illness, entire charge of all his affairs has 
devolved upon me with authority to act in his behalf. I 
have the exclusive handling of the buildings on the afore- 
mentioned property, and have kept the same in first class 
condition in order to obtain the best possible rentals. 

I attended your meeting held in the building of the 
Chicago Title and Trust Company on Monday, March 13, 
1905, and gathered that, in order to enable you to act in 
the fairest manner possible, in the reappraisal of said 



230 

property, the proper course for me, acting on behalf of 
Mr. Blair, would be to furnish you with such information 
as I could secure, showing the present conditions and the 
consequent value of said ground. With this object in 
view, I made application, March 16, 1905, to the Chicago 
Real Estate Board, for a valuation of this property, and 
I herewith submit the certificates showing their valua- 
tion of the same. Said certificates follow : 

Valuation Numbek 

$115,000 1060 

Chicago Real Estate Boaed. 

Chicago, March 21st, 1905. 
H. E. McCall, 

Dear Sie: 

We, the undersigned, members of the Valuation Com- 
mittee of the Chicago Real Estate Board, having care- 
fully considered the application made by you for a valu- 
ation of the following described property situated in the 
County of Cook and State of Illinois, described as fol- 
lows, to wit: 

Description of Land: Lots 2 to 9, inclusive, block 1, 
School Section Addn. to Chicago, size 100x200 ft. 

Description of Improvements., not valued, 
do hereby Certify that we have personally examined 
said property, that we have no personal interest in the 
same, and that in our judgment the present value is as 
follows : 

Value of Ground $115,000 

Value of Improvements $ 

Total Value, $115,000 

(Signed) Geo. Biekhoff, Jr., 
Callistus S. Ennts, 
Maeviist a. Faer, 
John B. Knight, 
Wyllys W. Baied, ^ 



Valuation 
Committee. 



231 

Valuation ' Number 

$77,160.00 1059 

Chicago Real Estate Board. 

Chicago, March 21st, 1905. 
H. E. McCall, 
Dear Sir: 

We, the undersigned, members of the Valuation Com- 
mittee of the Chicago Real Estate Board, having care- 
fully considered the application made by you for a valu- 
ation of the following described property situated in the 
County of Cook and State of Illinois, described as fol- 
lows, to wit : 

Description of Land : Lots 11 to 20, inclusive, block 1, 
School Section Addn. to Chicago, 

Description of Improvements, not valued, 
do hereby Certify that we have personally examined 
said property, that we have no personal interest iu the 
same, and that in our judgment the present value is as 
follows : 

Value of Ground, $77,160 

Value of Improvements, $ 

Total Value, $77,160 

(Signed) Geo. Birkhoff, Jr., 
Callistus S. Ennis, 
Marvin A. Farr, 
John B. Knight, 
Wyllys W. Baird, 



Valuation 
Committee. 



I have also written several letters to present business 
tenants of buildings on said property, all of which were 
sent subsequent to the making of leases for the coming 
year, excepting in the case of Mr. Forster, who had al- 
ready informed me that he would not renew. The copies 
of the above mentioned letters with questions asked, to- 
gether with the original answers of s.aid tenants, follow : 



232 

Chicago, March 15, 1905. 
Jos. P. Wathier Company, 

178 West Madison Street, Chicago. 

Gentlemen : 

The store which you occupy at the foregoing address 
is in a building belonging to me. The ground on which 
this building stands I lease from the Board of Education 
of the City of Chicago. According to the terms of my 
lease, the ground rental is fixed every ten years, by reap- 
praisement made by a Board of Appraisers. In accord- 
ance with certain provisions in said lease, the following 
gentlemen have been named as appraisers: John Mc- 
Laren, Esq., Judge Arba N. Waterman and Elbridge G. 
Keith, Esq. In order to assist and guide these gentle- 
men in arriving at a correct and equitable appraisement 
of the property, I am preparing a statement, and am go- 
ing to ask several of my old tenants to write me a letter 
giving actual facts, which I may possibly desire to verify 
with affidavit, believing that the honest expressions of 
your long experience will be worthy of great considera- 
tion. Your letters will be written with the understand- 
ing that they will be brought, in each case, to the atten- 
tion of this committee or their successors. 

I enclose memorandum of questions, the answers to 
which I think would give about the information required, 
and I wish that you would make any additional statement 
which you desire. 

If you are willing to accommodate me in this matter, 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Chakles H. Blair, 

McCall, Agt. 
Duplicate. 



233 

Original delivered to Jos. P. Watliier in person March 
15, 1905, by 

(Signed) H. E. M.. 

Memoeandum of Questions foe Jos. P. Wathiee 
Company. 

How long have you been continuously engaged in the 
wholesale and retail jewelry business at 178 West Madi- 
son Street ? 

Have you been in continued daily attendance at your 
business during this time? 

What do you think of the present conditions of busi- 
ness as compared with what it was ten or twelve years 
ago? 

If any great change, to what do you attribute it? 

Is it a fact that you owe to your wholesale and mail 
order trade the greater proportion of your business earn- 
ings ? 

And is it true that this business has been established 
by catalogues and advertising and is not due to your 
location? 

For strictly retail jewelry trade, what would you think 
would be a fair rental for your store? How does, your 
holiday trade compare now with what it was ten or fif- 
teen years ago, general business conditions in your line 
being considered? 

Are the above statements absolute facts, and would 
you verify them with affidavits if requested ? 

Would you allow a committee to examine your books 
to prove your statements? 

How much less, are you paying per year for your store 



234 

for the year ending April 30, 1905, than you did for the 
year ending April 30, 1895 1 

What are the prospects for business ahead? 

If your store was worth $150.00 per month ten years 
ago, what would it be worth to you now? 

How does the class of people that are patronizing you 
and passing your place of business at present compare 
with those that used to be there ten or fifteen years ago ? 

Chicago, March 15, 1905. 



Established 1874. Incorporated 1894. 

Jos. P. Wathiee Co., 

Wholesale Jewelers, 

178 West Madison Street. 

Telephone Monroe 461. 

Chicago, March 16, 1905. 
Mr. Charles H. Blair, 

175 Dearborn St., Chicago. 

Deae Sie: — 

Agreeable to your request of the 15th inst. we here- 
with hand you a statement of conditions which exist at 
the present date and have existed since 1883. 

We have been located at the above number since 1883 
as Wholesale, Mail-order and Retail Jewelers., and have 
practically been in daily attendance during that time, 
and would state that the present conditions compared 
with those of ten or twelve years ago are not as good as 
then. We would attribute the change to several reasons : 
the removal of The Peoples Gas Light and Coke Co.'s 
office. The Home National Bank, the postoffice from Hal- 
sted and Washington Streets, the West Town office from 



235 

the Haymarket Building, the removal of the Ogden Ave- 
nue, Blue Island Avenue and South Halsted street cars 
from our street, and also the removal of all the better 
class of people from our surrounding section. 

Our principal business is Wholesale, Mail-order and 
Catalogue business, the upbuilding of which is not due to 
any particular location in which we are located. We 
would consider $100.00 per month a fair rental, at our 
present location, for a strictly retail jewelry business., as 
our trade in this line has decreased at least 50 per cent, 
since 1893, which facts our books will verify. 

We would i^onsider the future purely speculative for 

this locality. 

Eespectfully yours, 

(Signed) Jos. P. Wathier Co. 



Chicago, March 15, 1905. 
Neely Brothers, 

172 West Madison Street, Chicago. 

Gentlemen : 

The store which you occupy at the foregoing address 
is in a building belonging to me. The ground on which 
this building stands I lease from the Board of Education 
of the City of Chicago. According to the terms of my 
lease, the ground rental is fixed every ten years, by reap- 
praisement made by a Board of Appraisers. In accord- 
ance with certain provisions in said lease, the following 
gentlemen have been named as appraisers : John Mc- 
Laren, Es.q., Judge Arba N. Waterman and Elbridge G. 
Keith, Esq. 

In order to assist and guide these gentlemen in arriv- 
ing at a correct and equitable appraisement of the prop- 



236 

erty, I am preparing a statement, and am going to ask 
several of my old tenants to write me a letter giving act- 
ual facts, which I may possibly desire to verify with affi- 
davit, believing that the honest expressions of your long 
exjDerience will be worthy of great consideration. Your 
letters will be written with the understanding that they 
will be brought, in each case, to the attention of this com- 
mittee or their successors. 

I enclose memorandum of questions, the answers to 
which I think would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 

If you are wijling to accommodate me in this matter, 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Charles H. Blair, 

McCall, Agt. 
Duplicate. 

Original delivered to J. C. Neely in person, March 15, 
1905, by 

(Signed) H. E. M. 



Memorandum or Questions for Neely Brothers. 

How long have you continuously occupied the store, 
172 West Madison Street? 

For what line of business 1 

Have you been in daily attendance at that business 
without interruption for the number of years, as above 
stated? 



237 

How much less rent are you paying for the year end- 
ing April 30,1905, than you did for the year ending April 
30,1895? 

Have you noticed any material change in business 
conditions during your experience on West Madison 
Street! 

If so, please state the time of material change and 
give your opinion of what caused it. 

Have you relied entirely on transient trade? If you 
should, how much per month would this store be worth 
to you? 

Is it a fact that you derive most of your income from 
mail order trade, which has been established throughout 
the country by your catalogues and advertising I 

From what neighborhoods did you formerly draw a 
considerable retail trade, and how do you account for the 
loss of this business? 

How does your transient trade at present compare in 
class and amount as to what it did ten, twelve or fifteen 
years ago? 

Chicago, March 15, 1905. (Duplicate.) 

Original delivered to J. C. Neely in person, March 15, 
1905, by (Signed) H. E. M. 

Neely Beos., 
Makers of 

The Neely Shoes. 

172 W. Madison St. 

Chicago, March 16, 1905. 
Mr. C. H. Blair, City. 

Dear Sir : Replying to yours of the 15th, we have been 
occupying the store at 172 W. Madison street since May 



238 

1, 1891 — fourteen years — ^with the best line of boots and 
shoes carried on the West Side. We have given close 
personal attention to the business, and have done every- 
thing possible to increase it. We get out a catalog for 
our mail-order business, and have collected quite a list 
of names of our customers by asking for their names 
when in the store. To these people we have also sent 
our catalogues — something that no other house in our 
line on this side of the city does. 

In the hope of building up a good business, we have cut 
our profits to the lowest possible point, and in spite of 
all this the business shows a steady decline, with the 
exception of 1903, when it ran a little ahead of the pre- 
vious year, due to the fact that the Emerson shoe store 
had been closed up. Last year came up smiling with the 
same old decline, as if it had come to stay. 

We account for this change in the neighborhood (be- 
cause we hear from about all of the merchants in our 
vicinity the same tale of woe) in the general change of 
street car transportation, as well as the great growth of 
the department stores on State street, and their ''fren- 
zied" ads. 

Years ago we used to have the cars from Blue Island 
avenue and Halsted street, turning around the corners, 
and going right past our doors. 

A very important line also was the Ogden avenue cars, 
which brought us lots of business on Saturday nights, as 
well as all through the week. The value of this road was 
very forcibly brought home to us on the first Saturday 
night after the change, from the fact that not one cus- 
tomer came in from that section of the city. The change 
in the running was made on Thursday, and when we 



239 

heard of it, we agreed that we would pay particular at- 
tention to see what effect it would have on the trade we 
had in the Lawndale section, and our conclusion was that 
it was a very bad ' ' dump ' ' for this part of the city. We 
now seldom hear the word "Lawndale" mentioned in 
the store, while it used to be one of the commonest ones. 
Our system of taking the names of our customers gives 
us authority to be as confident as we are of this change. 

There is little or no transient trade in this vicinity, 
and if it was not for our mail-order business we could not 
afford to stay here. Any one, with half an eye, can easily 
see the difference between the crowds that used to occu- 
py the corners on a pleasant evening years ago, and the 
few people that are now to be found there. Up to re- 
cently there was a considerable population of nice people 
living within a radius of five blocks of our corners. They 
have gradually moved to better locations — in many cases 
to the neighborhood, or at least as far as Kedzie avenue. 
The result is that they find it more convenient to take 
the elevated roads to the center of the city, and Madison 
and Halsted streets are ''lost in the shuffle." 

The transient trade of ten or fifteen years ago was 
far ahead of anything that we get now. Fully 90 per 
cent, of the new trade we get is sent directly to us by old 
customers. If we had to rely upon the transient trade 
we should soon ' ' dry up and blow away. " It is only for 
the fact that we have a trade that we established before 
the department stores were such an important item, that 
we can do enough business to stay here, with the help of 
our mail-order business, as we have been within a few 
feet of the present location since January 1, 1875, over 
thirty years. 



240 

Some six years ago we told you candidly of the way 
business was going, and you were generous enough to 
make a reduction of 30 per cent, in our rent. 

If we had to rely upon the business that is actually 
here, without counting our influence in drawing it here, 
we should not be willing to pay more than 50 per cent, of 
the present rental, and believe that no one else could do 
better than that. We consider that our catalogue in the 
country and city is all that has held us here, and not the 
location at all. 

We are sending you this statement without any hope 
of it doing us any good whatever, as we have a lease that 
was delivered to us before the receipt of your letter ask- 
ing for the facts. 

Very truly, 

Neely Bros. 
(Signed) J. 

P. S. — You probably know that the Ogden avenue cars 
now get down town by way of Eandolph street instead 
of Madison, as formerly, and that the Milwaukee ave- 
nue, Blue Island avenue, and the South Halsted cars all 
keep far away from us, while we formerly had them all 
going down Madison street, in the ''good old times." 

Chicago, March 14, 1905. 

Bernhard S Company, 166, 168 and 170 West Madison 
Street, Chicago. 

Gentlemen : The store floors and basements which 
you occupy at the foregoing address are in buildings be- 
longing to me. The ground on which these buildings 
stand, I lease from the Board of Education of the City 
of Chicago. According to the terms of my lease, the 



241 

ground rental is fixed every ten years, by reappraise- 
ment made by a Board of Appraisers. In accordance 
with certain provisions in said lease, the following gen- 
tlemen have been named as appraisers : John McLaren, 
Esq., Judge Arba N. Waterman and Elbridge Gr. Keith, 
Esq. In order to assist and guide these gentlemen in 
arriving at a correct and equitable appraisement of the 
property, I am preparing a statement, and am going to 
ask several of my old tenants to write me a letter giving 
actual facts, which I may possibly desire to verify with 
affidavit, believing that the honest expressions of your 
long experience will be worthy of great consideration. 
Your letters will be written with the understanding that 
they will be brought, in each case, to the attention of this 
committee or their successors. 

I enclose memorandum of questions, the answers to 
which I think would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 

If you are willing to accommodate me in this matter, 
kindly address letter to me at 175 Dearborn street, as 
soon as convenient. 

Yours truly, 
(Signed) Charles H. Blair. 
Duplicate. McCall, Agt. 

Original delivered to Joseph Bernhard in person, 
March 15, 1905, by (Signed) H. E. M. 



242 



Memoeandum of Questions fob Beenhaed & Company. 

What is your business, how long have you been con- 
tinually engaged in such business in the immediate vi- 
cinity of Madison and Halsted streets? 

How long have you occupied the premises you now oc- 
cupy and what rent did you pay for each store on your 
first lease? 

When does your present lease expire? 

What do you think of the present business conditions 
at Madison and Halsted streets, as compared with those 
of ten years ago this time ? 

To what do you attribute any change? 

Can you mention the names of reputable business men 
who have been actively engaged in business in the im- 
mediate neighborhood of Madison and Halsted streets 
for ten years or longer, whose opinions you believe would 
coincide with yours as expressed above? 

If so, please state their names and whether or not you 
think they would make statements if requested. 

Chicago, March 14, 1905. Duplicate. 

Original delivered to Joseph Bernhard in person, 
March 15, 1905, by (Signed) H. E. M. 



243 



Bernhard's 

men's and women's 
clothiers and outfitters. 

Telephone Monroe 545. 
166-68-70 W. Madison St., 
Opposite Haymarket Theatre. 

Chicago, March 16, 1905. 
Charles H. Blair, 175 Dearborn St., City. 

Dear Sir: We beg to acknowledge receipt of your 
favor of the 15th inst., regarding the conditions existing 
in and near Madison and Halsted streets, compared with 
conditions ten years ago. We are pleased to give you 
facts as we see them. 

We are engaged in the retail clothing business and 
have occupied the premises 168-170 W. Madison street 
since September 1, 1901, and No. 166 since May 1, 1903. 
Previous to 1901, the writer, Mr. J. Bernhard, was con- 
nected with Woolfs Clothing Co., corner Madison and 
Halsted streets, for fifteen years continuously, as secre- 
tary and manager of said concern. 

At the time we rented the premises of you they had 
been unoccupied for at least four or five years and no 
doubt you were glad to accept our offer of $75 per month 
per store. And, on account of the low rental and the 
large personal following enjoyed by Mr. Bernhard, we 
thought we would have no difficulty in building up a large 
and profitable business, but were very much disappoint- 
ed, and, after a year of ups and downs without making 
any headway, in spite of low rental and expense of con- 
ducting business, we were about ready to move to some 
other location, on account of so little transient patronage 



244 

caused by poor transportation facilities. This, we cer- 
tainly would have had to do, if we had not changed the 
policy of our business from a cash basis to an install- 
ment or easy payment one, and it is questionable if we 
would not be better off in a good down town location in a 
second or third floor loft at $1,200 per annum ; as all of 
the business must be done here by expensive advertis- 
ing. Our lease expires May 1, 1906, and we are not pre- 
pared to say at the present time whether we care to 
renew or not with conditions as they are now. We will 
show an example of difference in conditions and rentals 
on the best and most valuable corner, namely, northeast 
corner Madison and Halsted streets, occupied by Woolfs 
Clothing Co. Lease on said corner was renewed for seven 
years from 1891-1898 at an annual rental of $16,000 per 
year. In 1893, conditions had changed so, that Mr. James 
Parker, the owner of the above described property, vol- 
untarily reduced rental one-half (-|), and later in 1904, 
again reduced same to $6,000 per year. The same con- 
dition applies to building 177 W. Madison street, former- 
ly occupied by Woolfs Clothing Co., now occupied by S. 
F. Smith. Woolfs Clothing Co. paid $7,500 per year and 
when they dropped same, landlord, after remodeling 
same at an outlay of $10,000, rented to said S. F. Smith 
at $4,200 per year. 

The above statement will apply probably to every 
building in the neighborhood and Mr. Bernhard is ready 
to make affidavit to all of the above. If you want any 
further information along this line, he will be glad to 
assist you. 

Yours truly, 

E/B (Signed) Beknhard & Co. 



245 

Chicago, March 15, 1905. 

Louis H. Forster, 180 West Madison Street, Chicago. 

Deae Sir : The store which you occupy at the forego- 
ing address is in a building belonging to me. The ground 
on which this building stands, I lease from the Board of 
Education of the City of Chicago. According to the 
terms of my lease, the ground rental is fixed every ten 
years, by reappraisement made by a Board of Apprais- 
ers. In accordance with certain provisions in said lease, 
the following gentlemen have been named as appraisers : 
John McLaren, Esq., Judge Arba N. Waterman and El- 
bridge G. Keith, Esq. In order to assist and guide these 
gentlemen in arriving at a correct and equitable ap- 
praisement of the property, I am preparing a statement 
and am going to ask several of my old tenants to write 
me a letter giving actual facts, which I may possibly 
desire to verify with affidavit, believing that the honest 
expressions of your long experience will be worthy of 
great consideration. Your letters will be written with 
the understanding that they will be brought, in each case, 
to the attention of this committee or their successors. 

I enclose memorandum of questions, the answers to 
which I think would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 

If you are willing to accommodate me in this matter, 
kindly address letter to me at 175 Dearborn street, as 
soon as convenient. 

Yours truly, 

(Signed) Charles H. Blair. 
Duplicate. McCall, Agt. 

Original delivered to Louis H. Forster in person, 
March 15, 1905, by (Signed) H. E. M. 



246 



Memorandum of Questions for Mr. Foester. 

How long have you been engaged in business in the 
vicinity of Madison and Halsted streets 1 

In what line of business 1 

How does .business compare at present, and, say, for 
the past two or three years, with what it was ten or fif- 
teen years ago 1 

If any great change, to what do you attribute it? 

Where is the good trade you formerly enjoyed now 
doing business? 

Kindly make any statement which in your judgment 
would assist in ascertaining a true valuation of this prop- 
erty. 

Duplicate. 

Original delivered to Louis H. Forster in person, 
March 15, 1905, by (Signed) H. E. M. 

Phone Polk 1252. 

Office of 

Forster S'hirt Co., Inc., 

180 W. Madison Street. 

74 So. Halsted Street. 

Clothing, Gents' Furnishing Goods, Hats and Caps. 

Chicago, March 15, 1905. 

Mr. C. H. Blair, 175 Dearborn Street, Chicago. 

Dear Sir: In answer to your letter of the 15th inst., 
in which you ask for a statement of existing conditions 
of business, in the vicinity of Madison and Halsted 
streets, I will say that I have been in business for the 
past fifteen years in the above mentioned vicinity. My 
line of business is hats and men's furnishing. 



247 

You ask how business compares at present, and say 
for the past two or three years, with what it was ten or 
fifteen years ago. 

I will answer that business is cut down to one-half and 
it has been duller for the past two or three years, and I 
attribute the great change in this locality to the better 
class of families moving further west; the night trade 
that we formerly had, which was often better than the 
day business, has entirely disappeared. It really does 
not pay to keep open and light up the store, because it 
only makes a large gas hill and hig electric light hill to 
"pay," but nothing coming in to pay with. 

I asked a neighbor of mine what he thought the trouble 
was with the night business and this is what he answered : 
"Do you expect a respectable lady or gentleman would 
come down as far as Madison and Halsted streets to do 
any trading at night? Why they are not safe, the way 
things look around here." 

Furthermore, if necessary, I will produce my books, 
which throw a little more light on the subject. 

I sincerely hope that my letter will assist and guide 
the Board of Appraisers in arriving at a correct and 
equitable appraisement of your property. 

I remain, Sincerely yours, 

(Signed) Louis H. Forsteb. 

Chicago, March 15, 1905. 
William A. Freemati, 

174- West Madison Street, Chicago. 
Dear Sir: 

The store which you occupy at the foregoing address 
is in a building belonging to me. The ground on which 



248 

this building stands, I lease from tlie Board of Educa- 
tion of the City of Cliicago. According to the terms of 
my lease, the ground rental is fixed every ten years, by 
reappraisement made by a Board of Appraisers. In ac- 
cordance with certain provisions in said lease, the fol- 
lowing gentlemen have been named as appraisers: John 
McLaren, Esq., .Judge Arba N. Waterman, and Elbridge 
G. Keith, Esq. In order to assist and guide these gen- 
tlemen in arriving at a correct and equitable appraise- 
ment of the property, 1 am preparing a statement, and 
am going to ask several of my old tenants to write me 
a letter giving actual facts, which T may possibly desire 
to verify with affidavit, believing that the honest ex- 
pressions of your long experience will be worthy of 
great consideration. Your letters will be written with 
the understanding that they will be brought, in each 
case, to the attention of this Committee or their suc- 
cessors. 

I enclose memoranda of questions, the answers to 
which T think would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 

If you are willing to accommodate me in this matter, 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Charles H. Blair 

McOall Agt. 
Duplicate. 

Original delivered to William A. Freemen in person, 

March 15, 1905, by 

(Signed) HEM 



249 

Memokandum of Questions foe. AVilliam A. Freeman. 

How long have yoii occupied the store, 174 West Madi- 
son Street, and for what purpose? 

Have you been continuously engaged in the manage- 
ment of your business? 

How much less are you paying for your store for the 
year ending April 30, 1905, than you did for the year 
ending April 30, 1895! 

How do your daily receipts compare now, with what 
they were ten, fifteen or twenty years ago? 

Do you liave the same class of trade? 

What do you think of West Madison Street and its 
future? 

If you care to, please state how much money you have 
lost in the last ten years, in your business at the above 
address. 

On the basis that the store was worth to you, say 
$150.00 per month, ten years ago, how much would it be 
worth today? 

Have you ever talked with any other old-time business 
men in your immediate vicinity, who are not tenants of 
Mr. Blair's property, and whose opinion you believe 
would coincide with yours? 

If there has been a marked change in business condi- 
tions in your vicinity, to what do you attribute it? 

Do you intend to continue in business at the above 
address after April 30th this year? 

If not, why are you going to stop? 

Chicago, March 15, 1905. 

(Duplicate.) 



250 

Original delivered to William A. Freeman in person, 
March 15, 1905, by 

(Signed) H. E. M. 

Feeeman 's 

oyster and chop house, 

174 West Madison Street. 

Chicago, March 17, 1905. • 
Mr. Charles E. Blair, 

175 Dearborn Street, Chicago. 

Dear Sir: 

Eeplying to your questions under date of tlie 15tli 
instant, I will say that I am at 174 West Madison Street, 
and have been here for twenty years. While the busi- 
ness of the last year or two is a shade better than for 
the last three years previous to that time, take it ten or 
twelve years ago, my business was more than double 
what it is now. And that is due to the withdrawal of 
so many business houses from the neighborhood, and the 
filling in of a cheaper class of trade. Everybody knows 
that. The bank, the gas comjiany. Eraser & Chalmers 
and two clothing stores from the corner of Halsted and 
Madison streets and many other business firms that 
moved away. 

I am now paying about half the rent that I paid ten 
years ago and still not making so. much money out of 
my business as I was then. I cater to the first class busi- 
ness trade that comes several blocks from my present 
location, and if it were not for the trade that comes quite 
a distance, I could not afford to pay the rent that I do. 
Yours respectfully, 

(Signed) W. A. Freeman. 
FSA 



251 

Chicago, Marcli 15, 1905. 
Daniel Wagner, 

86 South Halsted Street, Chicago. 
Dear Sir: 

The store which yoii occupy at the foregoing address 
is in a building belonging to me. The ground on which 
this building stands, I lease from tlie Board of Educa- 
tion of the City of Chicago. According to the terms of 
my lease, the ground rental is fixed every ten years, by 
reappraisement made by a Board of Appraisers. In ac- 
cordance with certain provisions in said lease, the fol- 
lowing gentlemen have been named as appraisers : John 
McLaren, Esq., Judge Arba N. Waterman, and Elbridge 
G. Keith, Esq. In order to assist and guide these gen- 
tlemen in arriving at a correct and equitable appraise- 
ment of the property, I am preparing a statement, and 
am going to ask several of my old tenants to write me 
a letter giving actual facts, which I may possibly desire 
to verify with affidavit, believing that the honest ex- 
pressions of your long experience will be worthy of great 
consideration. Your letters will be written with the un- 
derstanding that they Avill be brought, in each case, to 
the attention of this Committee or their successors. 

T enclose memorandum of questions, the answer to 
which I think would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 

If you are willing to accommodate me in this matter, 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Charles H. Blair, 

McOall Agt. 
Duplicate. 



252 

Original delivered to Daniel Wagner in person, March 

17, 1905, by 

(Signed) H. E. M. 

Memorandum of Questions foe Mr, DanieIj Wagner. 

How long have you been engaged in business in Mr. 
Blair's property at Madison and Halsted Streets! 

In what line of business? 

How does your trade at present or for the past few 
years, at the above address, compare with what it was, 
say eight or ten years ago? 

Kindly make statements of facts which you think would 
furnish information concerning the true valuation of the 
property. 

Duplicate. 

Oiriginal delivered to Daniel Wagner in person, March 

17, 1905, by 

(Signed) HEM 

Office of 

Dan Wagner/s Bakery 

49 West Madison St. 

Phone Main 2958 



Mr. Charles H. Blair, 
175 Dearborn St. 



Chicago, March 18, 1905. 



Dear Sir: 

In answer to your questions, you just tell them that 
business has fallen off just about one-third since ten 
years ago. I have had a lunch room in your building at 
86 Halsted Street over ten (10) years and I have other 
places and the business has fell off all over. 



253 

The. change in car service has not affected me so much, 
because people don't take a car to eat; but the general 
business depression in the West side has fallen off. 

Yours truly, 

(Signed) Dan Wagneb. 

Chicago, March 15, 1905. 
Thomas McGaidey, 

82 South Halsted Street, Chicago. 

Dear Sie: 

The store which you occupy at the foregoing address 
is in a building belonging to me. The ground on which 
this building stands, 1 lease from the Board of Educa- 
tion of the City of Chicago. According to the terms of 
my lease, the ground rental is tixed every ten years, by 
reappraisement made by a Board of Appraisers. In 
accordance with certain provisions in said lease, the fol- 
lowing gentlemen have been named as appraisers : John 
McLaren, Esq., Judge Arba N. Waterman, and Elbridge 
G. Keith, Esq. In order to assist and guide these gen- 
tlemen in arriving at a correct and equitable apjoraise- 
ment of the property, I am preparing a statement, and 
am going to ask several of my old tenants to write me 
a letter giving actual facts, which I may possibly de- 
sire to verify with affidavits, believing that the honest ex- 
pressions of your long experience will be worthy of great 
consideration. Your letters will be written with the un- 
derstanding that they will be brought, in each case, to 
tlie attention of this C*ommittee or their successors. 

I enclose memorandum of question, the answers to 
which I tliink would give about the information required, 
and I wish that you would make any additional state- 
ment which you desire. 



254 

If you are willing to accommodate me in tbis matter 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Charles H. Blaie, 

McC'all Agt. 
Duplicate. 

Original delivered to Thomas McGauley in person, 

March 15, 1905, bv 

(Signed) HEM 

Memoeanditm of Questions foe Mr. Thomas McGauley. 

How long have you been engaged in business in South 
Halsted Street in the block between Madison and Mon- 
roe Streets? 

Have you been engaged continually in business in Mr. 
Blair's building, since they were first completed? 

Is it a fact that you are now paying one-third less 
rent than you were at this time ten years ago, and that 
your present rental and that for the coming year is as 
high or higher than you have paid at any time during 
the past eight years? 

During the past twenty-five years, at what period were 
your business conditions best? How have they been 
for the last seven, or eight years, as compared with 
ten, twelve or fifteen years ago or thereabouts? 

Can you give any reason for the changes? 

Duplicate. 

Original delivered to Thomas McGauley in jDerson, 

March 15, 1905, by 

(Signed) H. E. M. 



255 

T. McGauley 
Dealer in 

BLANK BOOKS, STATIONERY, 

Cigars and Tobaccos 
82 South Halsted Street 

Chicago, March 16, 1905. 
M. G. H. Blair, 
Deab Sir: 

In reply to your request for a statement from me in 
regard to the business on Halsted Street since I came 
on the street, and more especially the last ten years, as 
regards rents, etc. I submit the following facts, which 
you can use as you think best. 

In the fall of 1877 — I rented (Mr. Dodge being then the 
landlord) a small store on Halsted street between the 
corner of Madison st. and the alley as a News Depot and 
Cigar store — and remained there until Mr. Crilly and 
yourself got the ground lease — and in October 1880 I 
rented from you and have been with you ever since. So 
I have seen Halsted Street in its best as well as in its 
dullest periods. When I rented in 1877 and along up 
to 1890 Halsted and Madison st. was the busiest corner 
in Chicago at night. But when the street railroad com- 
pany took and changed the route of their cars from run- 
ning down Halsted to Madison and Eandolph st. and 
sent them around Van Buren St. the business left the 
corner and it is only lately since the transfer system 
went into effect, and the cars increased on the street, 
has any change for the better been felt. In regard to 
the last ten years — the rents have undergone a great 
change — 

Ten years ago I was paying for my store $85.00 a 
month but it was only a fictitious world fair boom, that 



256 

made it so high. Business was very poor, and as a re- 
sult the rent fell the following years — from $85.00 to 
$75.00 and then to $60.00 and then to $45.00 and in 1898 
I only paid $40.00 a month — and it is only the past four 
years that business is gradually improving and the 
rents have been graduall}^ increasing from $40.00 to 
$45.00 then to $50.00 and for the past year and the com- 
ing year it is $55.00 a month. 

Yours respectfully, 

(Signed) Thomas McGauley. 

Chicago, March 18, 1905. 
Gamron S Maddock, 

180-184 West Madison Street, Chicago. 

Gentlemen : 

The offices which you occujjy at the foregoing address 
are in a building belonging to me. The ground on which 
this building stands, I lease from the Board of Educa- 
tion of the City of Chicago. According to the terms of 
my lease, the ground rental is fixed every ten years, by 
reappraisement made by a Board of Appraisers. In ac- 
cordance with certain provisions in said lease, the fol- 
lowing gentlemen have been named as appraisers : John 
McLaren, Esq., Judge Arba N. Waterman, and Elbridge 
G. Keith, Esq. In order to assist and guide these 
gentlemen in arriving at a correct and equitable appraise- 
ment of the property, I am preparing a statement, and 
am going to ask several of my old tenants to write me 
a letter giving actual facts, which I may possibly desire 
to verify with affidavit, believing that the honest ex- 
pressions of your long experience will be worthy of great 
consideration. Your letters will be written with the un- 
derstanding that they will be brought in each case, to 
the attention of this committee or their successors. 



257 

I enclose memorandum of questions, the answer to 
which I think wonlrl give about the information re- 
quired, and I wish that you would make any additional 
statements which you desire. 

If you are willing to accommodate me in this matter, 

kindly address letter to me at 175 Dearborn Street, as 

soon as convenient. 

Yours truly, 

(Signed) Chaei.es H. Blaie^ 
H. E. McCall. 
Duplicate. 

Original delivered to .Gramron & Maddock in person, 

March 18, 1905, by 

(Signed) HEM 

Memo, of Questions fok Gtameon & Maddock. 
None asked. 

I. C. GAMEON, D. D. S. W. I. MADDOCK, D. D. S. 

Office of 
Des. GrAMEON & Maddock 

DENTISTS 

180 West Madison St. 
S. E. Cor. Madison and Halsted Sts. 

Chicaoo, March 18, 1905. 
Mr. C. H. Blair, 

175 Dearborn Street, Chicago. 

Deae Sie: 

We have been engaged in the practice of dentistry for 
the past fifteen years; from 1890 to 1892 in your build- 
ing, from 1892 to 1899 in the Eureka Building opposite 
here on Madison Street, and then from May 1, 1899, to 
the present time again in this building, with a lease con- 
tinuing one year longer to April 30, 1906. 



258 

Due to conditions existing in this neighborhood, we 
are going to get out and have made a six year lease, 
beginning the first day of this coming May, for the sec- 
ond floor N. W. corner of State and Randolph streets. 
We are tied here for another year by our present lease. 
In trying to sub-let the premises, we have been able to 
get offers not to exceed one-half the rent we are paying. 
We expect to pocket the los.s of one-half a year's rent 
on our present offices ; but, notwithstanding this loss, 
we think it would be best to get over town and not waste 
any more time in this neighborhood. 

One reason, for instance, when we told one of our 
old time patients of our intention to move down town, 
he said, ' ' Good ! You have been doing work for myself 
and sons for the last several years, during which time 
I have paid from four to six hundred dollars for dentistry 
for my wife and daughters, and had you been down 
town, I would have sent that business to you." This is 
only one of many cases, similar. 

When we opened up here, we did a great deal more 
transient trade. It is now less than 5% of our gross re- 
ceipts. There used to be easilj^ four or five times as 
much transient as at present. 

If you come and see us, if you come and talk to us, we 
can tell you things we do not care to write. The good 
class of people who formerly had their residences in 
this neighborhood, have been crowded out. Bums, gam- 
blers, thugs, barrel houses and lodging houses have taken 
their place. Washington Street formerly, for instance, 
ten years ago and up to six years ago, also Sangamon 
and Morgan streets, were good residence neighborhoods. 

After fifteen years experience here, we say this cor- 



259 

ner is gone to the bad and any first class old time retail 
dealer in this neighborhood will tell you the same thing. 

We have confined ourselves to facts, which we will 
substantiate personally, and these statements are made 
voluntarily. The revaluation does not affect us in any 
way, we having no personal interest in this matter. We 
expect to pay you another year's rent, and are glad 
to have this opportunity of informing you fully of why 
we are leaving the neighborhood. 

Yours truly, 
(Signed) Gamron & Maddock. 

At the last re-appraisal, Mr. Blair's annual ground 
rental was raised over $6,000.00 and he has often stated 
to me, during the past three or four years, that a fair 
rental for him to be paying would be $10,000.00 per an- 
num, instead of the present exorbitant rental, which he 
has been paying under written protest, a copy of which 

follows : 

(copy) 

Chicago May 8th 1901. 
L. E. Larson Secy. 

Schiller Bldg. City. 
I, Charles^ H. Blair, do hereby protest against the ap- 
praisement made by the Board of Appraisers for the 
year 1901, on the property leased by me from the Board 
of Education, viz : lots 2 to 9 inclusive and lots 11 to 20 
inclusive in block 1, in School Section Addition to Chi- 
cago, and against all proceedings had in relation thereto, 
and do hereby tender to you the rent alleged to be due 
under and by virtue of this lease, for the three months 
ending August 8th, amounting to the sum of $4875.00 
under protest, reserving all rights that I have under and 



260 

by virtue of my lease from the Board of Education, tlie 

same as if I liad continued to pay the rent fixed by the 

Board of Appraisers for the year 1885 and ratified by the 

Board of Education. 

Very respectfully 

Chaeles H. Blair, 

H. E. McCall Agt. 

The letters hereto attached are from some of the pres- 
ent tenants of the buildings on the property in question, 
who have been located in the same premises or in the 
same neighborhood during the past ten to thirty years, 
and in a measure illustrate the difference between con- 
ditions now existing and those which existed prior to the 
time of elevated railroads and other rapid transporta- 
tion facilities. And I desire to add that it was a con- 
ceded fact that the corners of Madison and Halsted 
Streets twelve to twenty years ago were nearly as vaula- 
ble for retail purposes as any property in the City of 
Chicago; but, since that time, they have been steadily 
depreciating in value, due to several causes, principally 
the concentration of business within the "Loop," due 
to the elevated roads and all other lines of transporta- 
tion centering there;- — also due to the fact that all Hal- 
sted Street and Blue Island Avenue car lines, which for- 
merly rounded at this corner, now turn at Van Buren 
Street, thereby robbing this corner of a very large 
amount of patronage of the great Southwest Side of the 
City ; and also, the character of the surroundings changed 
from that of a good residence section to one of the most 
inferior kind. Besides which the rentals of the property 
today, in that entire section, are, as an average, not more 
than fifty or^ sixty per cent of what they were prior to 
1893. These, together with other causes too numerous 



261 

to mention, have all militated to the disadvantage of this 
property. The buildings are kept fairly well rented 
through dint of the closest attention and greatest effort. 

On behalf of Mr. Blair, taking everything into consid- 
eration and in a spirit of fairness, I hereby offer The 
Board of Education the sum of Ten Thousand Six Hun- 
dred, ($10,600.00) Dollars per alinum for the ten years 
commencing May 8, 1905, and ask you for an appraisal 

of the groimd on this basis. 

H. E. McCall, 

Attorney in fact for 

Charles H. Blair. 

REPLY OF BOARD OF EDUCATION TO STATE- 
MENT OF C. H. BLAIR. 

To The Honorable Board of Appraisers 

of School Fund Property 

of the City of Chicago. 

Gentlemen : — ■ 

In the matter of the lease of Charles H. Blair from 
the Board of Education of the City of Chicago of the 
property known as Lots 2, 3, 4, 5, 6, 7, 8 and 9 and 11, 
112, 13, 14, 15, 16, 17, 18, 19, and 20 in Block 1 of School 
Section Addition to Chicago, known as Nos. 166 to 184 
West Madison Street, and Nos. 80 to 100 South Halsted 
Street, Chicago, Illinois, said Lots 2, 3, 4, 5, 6, 7, 8 and 9 
having a frontage of 200 feet, north front, on Madison 
Street and 100 feet, west front, on Halsted Street to an 
alley, said Lots 11, 12, 13, 14 and 15 having a frontage of 
125 feet, west front, on Halsted Street, 136.65 feet north 
of Monroe Street, by 150 feet in depth, to an alley, and 
Lots 1(6, 17, 18, 19 and 20 having a frontage of 136.65 



262 

feet, west front, on Halsted Street, by 100 feet, south 
front, on Monroe Street, to an alley. 

Your Honorable Body are called upon, under the terms 
of the lease and supplements thereto made between the 
Board of Education of the City of Chicago and said 
Charles H. Blair, to determine and ascertain the present 
cash market value of the fee of said above described 
property. 

Under date of March 25, 1905, Mr. H. E. McCall, sign- 
ing as attorney in fact for Charles H. Blair, filed with 
your Honorable Body a statement for the purpose of 
guiding you in determining the present cash value of 
said lots, and this statement is filed on behalf of the 
Board of Education of the City of Chicago for a like pur- 
pose. 

As we endeavored to show you in our statement filed in 
the matter of the lease of Daniel F. Crilly with the 
Board of Education of the City of Chicago, our conten- 
tion is, that the true and correct method to be followed 
in fixing your appraisal on these lots is to determine the 
present cash value of the naked lots with a clear title in 
fee simple, not taking into consideration the improve- 
ments thereon, and not considering the leasehold in con- 
nection therewith. 

In support of this contention, in our statement made to 
you on the Crilly lease we cited to your Honorable Body 
the case of Warren Springer v. John Borden, reported 
in volume 210, at page 518, of the Illinois State Supreme 
Court Reports, and we quoted in our statement with 
reference to the Crilly lease at much length from this 
case. As we have already placed the views of the Su- 
preme Court fully before your Honorable Body, we con- 



263 

tent ourselves, in this statement, with simply referring 
to the case, and this partly for the purpose of apprising 
the representative of the Blair lease of the legal author- 
ity relied upon by us. 

We now present to you our answer to the statement of 
fact set up in the statement made on behalf of Mr. Blair, 
and will attempt to furnish you with other facts, not 
submitted by him, which we deem will aid you in arriv- 
ing at a correct decision in this matter. 

In 1895 the appraisers fixed the value of the 200 feet 
frontage on Madison Street at $180,000.00, and the value 
of the 261.65 feet on Halsted Street at $145,000.00, mak- 
ing a total valuation of $325,000.00. Under the terms 
of the lease, the rent from this sum was, therefore, fixed 
at $19,500.00 per annum. Mr. McCall, as attorney in 
fact for Mr. Blair, concludes his statement by asking 
your Honorable Body to fix the rental of the aforesaid 
property for the ensuing ten years at the sum of $10,- 
600.00 per year, or a fraction over one-half of what has 
been paid during the past ten years. In support of his 
request, he has submitted valuations placed on said lots 
by the Eeal Estate Board of the City of Chicago, as fol- 
lows: 

On the Madison Street frontage, $115,000.00 

On the Halsted Street frontage, 77,160.00 

If these sums were to be taken as a correct valuation of 
the lots, the rental per year would be $11,529.60. 

Outside of the valuations placed by the Real Estate 
Board on the lots in question, Mr. McCall's statement is 
almost entirely made up of communications from tenants 
on the premises, written in reply to a request made of 
them. Outside of the valuation placed on the lots by 
the Real Estate Board and the statements made by ten- 



264 

ants, the statement furnished you by Mr. McCall is made 
up of general assertions not supported by facts. The 
Valuation Committee of the Eeal Estate Board have 
given no reasons for the valuations placed upon these 
lots, contenting themselves with simply certifying that, 
in their judgment, the value of the ground is, at the 
present time, as above stated. 

In 1881 the rent agreed upon between the Board of 
Education of the City of Chicago and Crilly and Blair, 
who were at that time the lessees of said lots, was $9,- 
027.00. In 1885 the appraisers found the rental value 
of said lots to be $13,252.50. In 1889 Mr. Blair bought 
out the interest of Mr. Crilly in the lease and paid him 
a bonus for the leasehold interest, in addition to the 
value of the buildings. In 1895, after a full presentation 
of facts to the Board of Appraisers then fixing the value 
of these lots, the rental value was found to be $19,500.00 
per year, and that sum has been paid for the past ten 
years. Mr. McCall, on behalf of Mr. Blair, now asks 
that the rental of said lots be reduced to $10,600 per 
year. 

We know of nothing which has occurred in the past ten 
years to reduce the rental value of these lots, and we 
are unable to see how Mr. Blair can claim he is entitled 
to any such reduction, or in fact to any reduction when 

''First: — The population of the City has largely in- 
creased in that time to the extent, probably, of 600,000 
new people. People make values, and the increase in 
the number undoubtedly increased values. 

Second : — John M. Smyth, adjoining Blair on the east, 
has made the greatest success of his life in his business 
at that locality since 1895. 



265 

Third: — Adam Scliaaf, at the corner of Union and 
Madison Streets, paid, since 1895, $1,000.00 a front foot 
for that corner, which is 20 feet shallower than Blair's, 
and on it put np a handsome four story piano house, 
which is a business success. Blair's frontage on Madi- 
son Street, 20 feet deeper, in 1895 was valued at only 
$900.00 a front foot. 

Fourth: — When the 1895 valuations were placed, we 
were still in the throes of the panic .of 1893, the baneful 
effects of which have since disappeared and we are now 
in the midst of prosperous real estate times. 

Fifth : — Since 1895 the West Side has seen the genuine 
development of its life, from the river as far west as 
Peoria Street and in the district from Lake to Harri- 
son Street. On the south are the immense structures of 
the Western Electric; the number of buildings put up 
by Joseph Downey, William Grower and Isaac Eubel; 
the last mentioned gets from the Co-operative Supply 
Company in a single rent $37,000.00 a year. Many other 
large structures have gone up in that district; on Lake 
Street, in 1898 and 9, Durand & Kasper Co. paid from 
$900.00 to $1100.00 a front foot for their various pur- 
chases; since 1900 Sears & Eoebuck have paid J. Har- 
ley Bradley $900.00 a front foot for the corner of Fulton 
and Jefferson Streets, and on the property are now run- 
ning one of the largest enterprises in the world. Be- 
tween Randolph and Washington Streets and one-half 
block beyond, south, along West Water Street, is the 
mammoth concern of the Butler Brothers, and next to 
them is the large establishment of Kelley, Maus & Com- 
pany. Both the Butler Brothers' and the Kelley, Maus 
& Company's properties are on a basis of a little over 
$10.00 a square foot, when the Blair's here at this point. 



266 

in 1895 was valued at $9.00 a square foot on the Madison 
Street front and $4.47 a square foot on Halsted Street 
front. 

Sixth: — The City has just finished a notable work in 
getting the three blocks on West Eandolph Street, from 
Halsted to Sangamon Streets, condemned, making a du- 
plicate 150 foot width, the same as the old Haymarket, 
which will bring a much larger volume of business to 
this general locality. On July 26, 1902, the duplicate 
corner of this, on Randolph and Halsted Streets, Eliza- 
beth Kaschlein, et at., sold to Albert A. Hanisch for 
$1186 a front foot, or $11.86 a square foot. Even as 
far down as 12th and Halsted Streets, Mr. Phillipson is 
now completing, for retail business, the finest depart- 
ment store ever located on Halsted Street at any point. 
The South East comer of Halsted and 12th Streets has 
been leased in this last year on a basis of $1,000.00 a 
front foot, 100 feet deep. 

Seventh : — The South West corner of Van Buren and 
Halsted Streets is leased to Mr. Monaghan on a basis of 
$1,000.00 a front foot. 

Eighth: — It is a matter of easy determination that 
more people are now being carried on the Halsted Street 
trolley line than ever before. In place of a diminution 
in value occurring in West Side property, in the business 
district of that section, more factors of value have made 
their appearance there in the last few years than in its 
entire history heretofore. Able investors regard their 
holdings there as more securely intrenched in high values 
as a permanency than ever before. If Mr. McCall's 
reasons were correct, then ten years hence he would in- 
sist on another reduction from the Board. No unbiased 
person can believe that the bottom is going to drop out 



267 

of Ciiicago real estate values. The fact that this prop- 
erty is situated on the corner of two section lines is an 
added element of benefit. It must be admitted that, as 
Mr. McCall states, residences are disappearing from 
this locality, but it must also be admitted that the whole- 
sale use to which a great portion of this property is now, 
and has been lately transformed is a very much more 
valuable use than residence use. The trend of opinions 
of men interested in this locality is, that here can and 
will be established the finest retail district on the West 
Side." 

From the foregoing it would seem that the present 
rental for the lots in question of $19,500.00 a year is a 
very moderate one. We have no means of knowing the 
effect which may be produced on the minds of your Hon- 
orable Body by the values placed on these lots by the 
Valuation Committee of the Chicago Real Estate Board, 
but we again call your attention to the fact that they 
have given you no reasons for such values. We have 
no means of knowing whether they considered the lease- 
hold value or the reversionary interest, or whether they 
followed the method laid down by our Supreme Court, as 
being the correct one, namely: the cash market value of 
the lots at the present time, irrespective of any lease or 
buildings connected therewith, the title to the same being 
clear. 

It would seem to us that the following method of com- 
putation clearly shows that $19,500.00 a year should be 
the minimum fixed by your Honorable Body : 

The corner of Madison and Halsted Streets, on the 
present valuation, which, with the Monroe Street corner, 
produces the rent of $19,500.00, is figured on a basis of 
$9.00 a square foot, while the corner of Monroe and Hal- 



268 

sted Streets is figured on a basis of about one-half that 
sum, or, to be accurate, $4.47 a square foot. The extreme 
conservatism of these square foot values is demonstrated 
when we compare the value of similar locations, to-wit: 
That at the corner of Union and Madison Streets, as 
shown by the Schaaf purchase at $12.50 a square foot; 
that at the corner of Halsted and Randolph Streets, as 
shown by the Hanisch purchase at $11.86 a square foot, 
and that established by the lease of the South East cor- 
ner of Halsted and 12th Streets at $1,000.00^ a front foot, 
making a value of $12.50 a square foot. It is a matter 
of common knowledge among all persons familiar with 
West Side values, that none of these last mentioned cor- 
ners, nor, in fact, any corner on the West Side, is as 
valuable as the corner of Halsted and Madison Streets, 
which stands as the point of highest value in the West 
division of this City. 

We respectfully submit to your Honorable Body, that 
the reduction asked for by the representative of Mr. 
Blair should not be considered or allowed, and that the 
minimum rental fixed by your Honorable Body must be 
at least $19,500.00 per annum. 

BoAED OF Education of the City of Chicago, 
By James Maher and 

Angus Roy Shannon, 

Its Attorneys. 



269 

CHARLES H. BLAIR. 

Statement of H. E. McCall iisr Rebuttal. 

To the Board of Appraisers of 

School Fund Lands {for 1905)' of the 

City of Chicago. 
Gentlemen : 

On tlie 27tli ultimo, you received a statement dated 

March 25> 1905, submitted on behalf of Mr. Charles H. 

Blair, and on the 17th instant the writer received a copy 

of statement made by the Board of Education in reply 

thereto. 

On the first day of the present month Mr. Charles H. 
Blair died and, by his last will and testament, the prop- 
erty referred to in the aforementioned statements has 
passed into the possession of Minnie E. "Warren, as 
Trustee, on whose behalf I herewith desire to make an- 
swer to the statement of the Board of Education : 

We admit and concede the contention made by the 
Board of Education in their statement, that the true and 
correct method to be followed in fixing your appraisal 
of these l^ts is ' ' that the present cash value of the naked 
lots be determined, with a clear title in fee simple, not 
taking into consideration the improvements thereon and 
not considering the leasehold in connection therewith." 

We quote from statement of the Board of Education 
the following clause: "We now present to you our an- 
swer to the statement of fact set up in the statement 
made on behalf of Mr. Blair, and will attempt to furnish 
you with other facts not submitted by him, which we 
deem will aid you in arriving at a correct decision in this 
matter. ' ' 



270 

We do not, nor shall we attempt to avoid any facts, 
it being our desire to pay a fair rental for the property 
in question and in strict accordance with the terms and 
conditions, as well as the spirit, of our leases from the 
Board of Education. We do not desire to shirk respon- 
sibility in any manner whatsoever, and are both ready 
and willing to pay as rental the six {6<%) per cent, of 
the fair cash valuation of the property, as is required 
in said leases (though the prevailing rate of income on 
such cash valuations of land in the City of Chicago, is 
four per cent net to the owner of said land, and where 
there are no taxes levied on the ground, as has been the 
case with property owned by the Board of Education, 
the rental would be computed at five per cent net on the 
cash valuation). Present indications seem to be that 
there will be taxes levied upon the ground, which we have 
not asked you to take cognizance of in our former state- 
ment. 

The Board of Education, in their answer, say that they 
will attempt to furnish you with facts other than those 
set up in our statement, to which we make answer as fol- 
lows: 

The Board of Education say, that, in support of Mr. 
McCall's request to make a rental for the ensuing ten 
years $10,600.00 per annum, he has submitted valua- 
tions of said lots by the Real Estate Board of the City 
of Chicago, and if their valuations are to be taken as a 
correct valuation of said property, the rental would be 
$11,529.60 per annum. Believing the Real Estate Board 
to be too high in their valuation of the property, there- 
fore, the offer of $10,600.00 was submitted, that amount 
being the minimum rental under the terms of the leases. 

I quote the following clause from the statement of the 



271 

Board of Education: "Outside of the valuation placed 
on the lots by the Real Estate Board and the statements 
made by tenants, the statement furnished you by Mr. 
McCall is made up of general assertions not supported 
by facts." 

Eef erring to this clause, I desire to say that every 
statement made by me is the truth in fact, and I stand 
ready and willing to be corrected and convinced to the 
contrary; and I challenge the denial of the truth of any 
of my assertions in said statement contained; there has 
been nothing said in the statement of the Board of Edu- 
cation in contradiction of, or disproving statements made 
by me, nor the unbiased statements made by merchants 
of good character and standing and which were submit- 
ted with my previous statement. 

The Board of Education in their statement say : ' ' that 
the Valuation Committee of the Real Estate Board have 
given no reasons for the valuations placed upon these 
lots, contenting themselves with simply certifying that, 
in their judgment, the value of the ground is, at the pres- 
ent time, as above stated." 

With reference to this clause, I desire to say that I 
had a valuation placed upon this property by the Real 
Estate Board of the City of Chicago for the purpose of 
aiding you in your deliberations, and believing their 
valuation committee (comprised of men of high standing 
both in the real estate and general community) to be ex- 
cellent authority and well versed and equipped for the 
purpose of making such valuation. 

I am not familiar with the mode of procedure and the 
method employed by the valuation committee of the Real 
Estate Board in arriving at their conclusions, but I shall 



272 

be pleased to secure from them any further information 
or data, if you so desire. I believe that you will agree 
with me that, if they certify in their judgment, to the 
value of a certain piece of property, that they do not do 
so without sufficient reason and warrant. 

The Board of Education, in their statement, acting on 
the theory that the value of this property could only en- 
hance and not depreciate, cite the rental paid for the 
property herein referred to in 1881, the increased rental 
paid in 1885, and the increased rental paid in 1895, and 
say that they know nothing which has occurred in the 
past ten years to reduce the rental value"^ of these lots, 
and that they are unable to see how Mr. Blair can claim 
he is entitled to any such reduction, or in fact to any 
reduction. If this be the truth, that they are unable to 
see how Mr. Blair should be entitled"^ to the reduction 
asked for, it must be either because they are blind to the 
situation, or that they will not see and admit the fairness 
of the request for such reduction; and their claiming 
to know of nothing which has occurred in the past ten 
years, to reduce the rental value of these lots, shows 
their ignorance of the conditions now and heretofore 
existing with reference to this property. 

The Board of Education, in seeming justification of 
the stand which they take, say: "The population of the 
City has largely increased during the last ten years, 
probably to the extent of 600,000 new people. People 
make values, and the increase in the number undoubtedly 
increased values." 

We grant this statement to be correct, but where are 
these people? The increased population of the City of 
Chicago is in the outlying districts of the city and largely 



273 

in that portion of the down town center within what is 
known as "the loop." From all I can learn, I venture 
to say there are today less than 50 per cent, of the num- 
ber of people who congregate on or walk by the corner 
of Madison and Halsted streets than there were ten 
years ago, notwithstanding the large increase in the 
population of the City of Chicago. Where are the large 
business institutions which formerly flourished at and 
near the corner of Madison and Halsted streets, such as 
Woolf's clothing house, Griesheimer's, the Home Na- 
tional Bank, etc.? They have been forced to locate at 
other places, on account of the changed conditions, caused 
by the elevated roads, the Union Loop, and other rapid 
transportation facilities, which have brought the center 
of the city into closer contact with the outlying districts, 
to the detriment of such in-between property as the cor- 
ner of Madison and Halsted streets. The immense de- 
partment stores and high office buildings have, as every 
one posted knows, been most harmful in effect upon the 
value of such property as Halsted and Madison streets. 
Also, it should not be forgotten that this property has 
been largely hurt on account of the abandonment of 
Madison and Halsted streets by the Blue Island avenue 
and Halsted street cable lines, and the Ogden avenue 
street cars. Any one well versed in real estate matters 
in the City of Chicago, will admit the large increase, dur- 
ing the past ten years, in values of most property in the 
heart center of the city, which is usually referred to as 
"within the loop property," also the increased values 
of outlying property, which was chiefly caused by the 
present rapid transportation facilities and the conse- 
quent congestion now existing within the "loop." We 
admit the contention of the Board of Education that, 



^74 

^ ' People make values and the increase in the number un- 
doubtedly increased values." It is a poor rule that does 
not work both ways, so it must be true that, if the in- 
crease in the number of people makes increased values, 
so does the decrease in the number of people make de- 
creased values. We contend that the number of people 
congregating or walking by the property in question (so 
far as we can learn) is less than 50 per cent, of the num- 
ber on whom this property was dependent upwards of 
ten years ago, and which at that time gave it a much 
greater value than it today possesses. In support of 
this contention, I have undertaken to give you what I 
believe to be the best proof, viz., the unbiased statements 
of reliable men and trustivorthy merchants who are thor- 
oughly familiar ivith conditions as they existed upwards 
of ten years ago, and as they exist today. 

In support of the foregoing statements and the cor- 
rectness of the position I take in this matter, I quote 
the following clauses from the statement (now in your 
possession) rendered by the Board of Education in re- 
ply to Mr. Daniel Crilly's statement with reference to 
the corner of Monroe and Dearborn streets : 

^'1. The city has largely increased in population. 
Any one who reflects knows it is people who make values. 
If you were to take away the people from Chicago, there 
would be very little value to the land here. It is true, 
especially in a business sense, that the greater the num- 
ber of people who congregate at, or pass, a certain lo- 
cality, the greater are the values attaching to that point. 

^'2. We have here in Chicago the ability to bring 
into the limited space called 'inside the Union Loop,' com- 
prehending thirty-seven blocks, more people a day and 



275 

to bring tliem out again at niglit, than any other like area 
in any other city in the world. And again, the values of 
real estate in the Union Loop district can be made as high 
as the real estate values of London, Paris, or New York, 
and are rapidly approaching the same, and still pay hand- 
somely on such value. 

'^3. The sky-scraper, so-called, has made it possible 
for down town property to earn two and three times the 
amount of rent on the same area of ground. One illus- 
tration will suffice. The First National Bank people are 
today getting rent from eighteen stories, where before 
they got rent from but five. ' ' 

This condition of affairs has been accomplished not 
alone by the increase of population of the city, but at the 
expense of property in other sections of the city. All 
men posted in Chicago real estate will admit that there 
are many sections of the city having values today less, by 
from 25 per cent, to more than 50 per cent., of those pre- 
vailing ten to twenty years ago. I make this statement 
to show that it is not necessarily said that, though a city 
might increase as Chicago has increased in population 
in the last decade, that all property must increase in the 
same ratio. In the case of Chicago, it has been an in- 
crease in property formerly considered as outside prop- 
erty and down town property ; but sections as that portion 
of the city bounded by Twelfth street on the north. Thir- 
ty-ninth street on the south, Halsted street on the west 
and the Lake on the east, have many pieces of property 
contained therein, which will today not sell for more 
than 40 per cent, and 50 per cent, of what could have 
been obtained for the same property from ten to twenty 
years ago. 



276 

The same conditions exist in certain sections on the 
North Side, also in certain sections on the West Side. I 
could go into detail and quote specific instances and 
pieces of property, but do not feel the necessity therefor, 
believing you to be conversant with this situation. 

In the statement of the Board of Education in answer 
to the ''Crilly" statement, they say: "The average man 
does not think Chicago is going to stop growing, and 
certainly your honorable 'body cannot speculate on fu- 
ture depreciations which would be merely conjectural and 
can have no place in your deliberations." We believe 
this contention to be correct. We do not think that Chi- 
cago is going to stop growing, but we do think that she 
is going to continue to grow, and we hope that ten years 
hence the growth will have been in our direction; as we 
would much prefer being identified with property that 
is going ahead, rather than property not holding its own, 
or going backwards. 

Quoting from the statement of the Board of Education 
in answer to Mr. Crilly's statement, they say, "It mat- 
ters not what property sold for ten years ago, or eighty 
years ago, or any number of years ago, or what it may 
sell for one hundred years hence ; the test is what is the 
present cash market value of the land in question. And 
it certainly will be conceded by any unbiased person 
that down town property is much more valuable today 
than it was five years, or even three years ago." 

I admit the test is, what is the present cash value of 
this property? It certainly will be conceded, by any un- 
biased person familiar with the situation, that the prop- 
erty in question has not a value, at the present time, of 
more than 50 per cent, of what it had upwards of ten 
years ago. 



277 

I quote from the statement of the Board of Education 
in reply to the statement of Mr. Crilly as follows : 

''From an analysis of all the transactions bearing on 
values, the down town minimum value would seem to be 
on this corner $100 per square foot, or a total of $1,248,- 
000, which, at 4 per cent., would make a rental of $49,- 
920 a year, or, if placed on the 6 per cent, rate, the value 
would be $66.66 a square foot, or a total valuation of 
$832,000, which at 6 per cent, would produce $49,920." 

From the foregoing it will be observed that, though 
the Board of Education contend that the value of said 
corner is $100 per square foot, at the same time their 
argument seemingly favors the present going rate of 
income at 4 per cent., and, if this be fair in one case, it 
should be fair in all cases ; and, if we were to try to es- 
tablish a rate of 4 per cent, on the true cash valuation 
of the property we have under lease from the board, we 
would offer less than $8,000 per annum, because we firm- 
ly and truly believe that the cash value of the ground 
which we have under lease is much less than $200,000. 

We quote from the statement of the Board of Edu- 
cation as follows: "John M. Smyth, adjoining Blair on 
the east, has made the greatest success of his life in his 
business at that Locality since 1895.'-' We do not dis- 
pute this assertion, but what bearing has this statement 
upon the question at issue? The concern of John M. 
Smyth stands alone, in a class by itself. The nature and 
conditions which surround their business are such, that 
the location of their business house is not the first, or 
most essential requisite of their business ; as is and was 
the case with the large establishments which formerly 
occupied the comers of Madison and Halsted streets, 



278 

and Madison street in the neighborhood of said corners. 
John M. Smyth is in the installment furniture and gen- 
eral mail order business, and we do not attribute any 
portion of his success to the location of his business 
house, but believe it to be due to the fact that he is a 
pioneer in his line and to his individuality, wealth and 
great business ability. 

While we do not contend that the location of John M. 
Smyth has hurt values in the section in which he is lo- 
cated, at the same time we do contend that his concern 
being at its present location has not increased the value 
of the property adjacent to and surrounding him. John 
M. Smyth's business is largely "mail order" and, as is 
now being demonstrated in the case of the mail order 
concern of Sears, Roebuck & Co. (who are moving their 
great establishment out to 12th and Kedzie avenue), a 
large portion of bis business could be done as well on 
property worth 50c a square foot, as where he is at pres- 
ent located. In connection with this, let me call your 
attention to the following clause in the letter of Bernhard 
& Company, the original of which letter we handed you 
with our first statement. 

*'We will show an example of difference in conditions 
and rentals on the best and most valuable corner, viz., 
Northeast comer Madison and Halsted Streets, occupied 
by Woolf 's Clothing Co. Lease on said corner was re- 
newed for seven years from 1891 to 1898, at an annual 
rental of $16,000.00 per year. In 1893 conditions had 
changed so that Mr. James Parker, the owner of the 
above described property, voluntarily reduced rental one- 
half, and later, in 1904, again reduced same to $6,000.00 
per year. The same condition applies to building 177 
Wesf Madison Street, formerly occupied by Woolf 's 



279 

Clothing Company, now occupied by S. F. Smith. Woolf s 
Clothing Company paid $7,500.00 per year and when they 
dropped same, the landlord, after remodeling same at an 
outlay of $10,000.00, rented to said S. F. Smith at 
$4,200.00 per year. The above statement will apply to 
every building in the neighborhood, and Mr. Bernhard is 
ready to make affidavit to all of the above." 

With reference to what the Board of Education say re- 
garding the corner of Union and Madison streets, pur- 
chased by Adam Schaaf, I desire to state, first, that this 
is a small corner having a frontage of about 45 feet on 
Madison street and, as every one conversant with the 
values of real estate used for retail purposes is aware, 
the smaller the corner the greater and much more pro- 
portionate value it bears to the property adjacent there- 
to. We believe and know that the 50 foot corner of Madi- 
son and Halsted streets has a cash value largely in ex- 
cess of that of the 150 feet east and adjacent thereto. I 
had a talk with Mr. Schaaf, to ascertain what he con- 
sidered the present value of their ground at the corner of 
Union and Madison streets, as compared with the price 
paid by them for same. Answering my question, he said : 
''There has been a considerable falling off in values on 
West Madison Street in this neighborhood in the last ten 
years, West Madison Street has had a black eye and we 
must all suffer from it. The conditions are deplorable, 
but a fact. I have heard men well posted make state- 
ments to the etfect that values in this neighborhood have 
depreciated more than 50% during the past ten years." 

The Board of Education, in their statement, say: 
"We are now in the midst of prosperous real estate 
times." This might be true as regards real estate in the 
down town and outlying districts, but it is absolutely in- 



280 

correct, in connection with that section in the neighbor- 
hood of Madison and Halsted Streets, as compared with 
those times about fifteen years ago. 

With reference to the statement of the Board, regard- 
ing the development of that portion of the West Side 
bounded by Peoria Street on the west. Lake Street on 
the north and Harrison Street on the south, since 1895', 
and the structures of the Western Electric, the Downey, 
Grower and Rubel buildings, and other large structures, 
— have to say that these buildings and improvements, 
which they speak of as having been put up since 1895, 
are buildings used for wholsesale and warehouse pur- 
poses, and have absolutely no bearing, nor have they 
given any increased value, to the property in question. 

Investigation will probably prove that there is plenty 
of property still to be had in said section (bounded by 
Peoria, Lake and Harrison Streets and the River), at 
$2.00 or less per square foot. 

With reference to the statements of the Board regard- 
ing the values of other properties which they cite, — have 
to say that they are all small areas, as compared with 
the area of the property in question, and, therefore, fair 
comparisons, which they endeavor to show, are impos- 
sible. 

Regarding the statement of the Board of Education as 
follows : 

•'The Southwest corner of Van Buren and Halsted 
Streets is leased to Mr. Monaghan on a basis of $1,000.00 
a front foot, ' ' — have to say that the Blue Island Avenue 
and Halsted Street cable car lines, as well as other lines 
of transportation, which formerly contributed to the 
corner of Madison and Halsted Streets, now contribute 



281 

to the corner of Van Buren and Halsted streets, at the 
expense of said corner of Madison and Halsted Streets. 
And, even though the ground at said southwest comer 
of Van Buren and Halsted Streets is a fee, with a ninety- 
nine year straight lease secured by a good building, the 
owner of said fee, who has been offering same for sale 
for the past few months, has been unable to dispose of 
same on any such basis. 

We note that the Board of Education are careful to 
say that, ''more people are being carried on the Halsted 
Street trolley line than ever before," and have avoided 
saying anything whatsoever regarding the Blue Island 
Avenue and Halsted Street cable lines, and the Ogden 
Avenue line, the removal of which and the now existing 
Metropolitan Elevated Railroad, etc., have all contrib- 
uted towards the depreciation of the property in ques- 
tion. 

We quote from the statements of the Board of Educa- 
tion as follows : "If Mr. McCall 's reasons were correct, 
then ten years hence he* would insist on another reduc- 
tion from the Board. No unbiased person can believe 
that the bottom is going to drop out of Chicago real es- 
tate values." 

Replying to this, have to say we do not believe that 
the bottom is going to drop out of Chicago real estate 
values, nor do we know what we are going to ask for 
ten years hence. The question is not, "What has been 
the value of this property ? ' ' — nor, ' ' What will be the value 
ten years hence?" It is, as the Board contend in their 
reply to Mr. Crilly's statement, ''What is the present 
cash value of this property f" 

It is not my desire, nor am I attempting to influence 
you gentlemen in the wrong direction. I am merely giv- 



282 

ing you a statement of facts as they exist at the present 
time, regarding which facts I stand ready to give you 
further proof, if you so desire, I quote from the state- 
ments of the Board of Education as, follows: ''From 
the foregoing, it would seem that the present rental for 
the lots in question, of $19,500.00' a year, is a very mod- 
erate one. We have no means of knowing the effect 
which may be produced on the minds of your Honorable 
Body by the values placed on these lots by Valuation 
Committee of the Chicago Real Estate Board, but we 
again call your attention to the fact that they have given 
you no reasons for such values." Regarding this clause, 
have to say that we consider a rental of $19,500.00 per 
annum both excessive and unjust. Mr. Blair, during the 
last several years of his lifetime, considered the rental 
he was paying as being excessive and unjust, and when- 
ever he paid his installments of rent for said property, 
he did so under written protest, as those identified with 
the Board of Education and familiar with this property 
well know. 

As regards, the question of whether the leasehold value, 
or the reversionary interest, etc., was considered by the 
Valuation Committee of the Chicago Real Estate Board 
in making their valuation of said property, have to say 
that their valuation teas made upon the naked grownd, 
regardless of the buildings thereon or the leasehold in- 
terests therein. I believe this fact is shoivn on their cer- 
tificates of valuation handed you. 

As regards the statement by the Board of Education 
that said Valuation Committee gave you no reason for 
such values, have to say, we assume, and you will prob- 
ably agree with us, that there was good reason for mak- 
ing such valuations, otherwise the men that signed that 



283 

certificate would not have subscribed their names there- 
to. At the same time, should you s.o desire, we shall 
gladly undertake to secure from each member of said 
Valuation Committee his reasons, and the method and 
manner in which they arrived at their conclusions. 

The Board of Education, on the last pages of their 
statement, seek to influence you in the fixing of the rental 
value of this propert^^ in a manner most unfair, viz. : 
They suggest a method of computation by a comparison 
of values of corners having a very small area with cor- 
ners having a very large area ; and, while they claim cer- 
tain values per square foot for the corners they would 
have you compare with the property in question, we deny 
that the properties quoted by them have any such square 
foot values to-day as they have given them. And we 
most emphatically deny what they are endeavoring to in- 
sinuate as a fact, that, if they were to attach the prop- 
erty adjoining the corners they quote, to said corners, 
giving said corners a similar area to that of the corners 
of Madison, Monroe and Halsted Streets, that they could 
go on the open market and dispose of said properties for 
more than one-third the square foot values they have 
placed upon said corners. 

With reference to the statement of the Board of Edu- 
cation, in reply to the statement of Mr. Blair concerning 
the cash value of the property, you will note that not 
one good reason has been advanced by them to show that 
the rental for said property should not be reduced as re- 
quested. The general denial, in their reply to our re- 
quest, is on the lines that Chicago has increased in popu- 
lation and that there has been considerable development 
gn the West Side, and, therefore, the property in ques- 
tion necessarily must have gone forward and not back- 



284 

ward. They have not made denial of any one of the 
many statements made by the ten merchants (men of 
good standing), which were attached to and made a part 
of Mr. Blair's statement; nor have they specifically de- 
nied any fact contained in the statement of Mr. Blair. 
They have mentioned certain improvements as having 
been made on the West Side, but have not demonstrated 
how, in any one instance, they have affected for its good, 
the value of the property in question. They have not 
gone into the question of rentals obtaining by the owners 
of the four corners of Madison and Halsted streets and 
the property adjacent thereto, as compared with that of 
fifteen years ago; for the reas.on that (if they were 
posted) they would well know that they would make a 
most unfavorable comparison. In short, they are either 
not conversant with the present cash value of the prop- 
erty, or they are unfair, when they ask you that the re- 
duction asked for by Mr. Blair should not be considered 
or allowed, and that the minimum rental fixed by your 
Honorable Body must be at least $il9',500.00 per annum. 
Wliile the stand taken by the Board of Education in this 
matter (that the rental on this property should not be 
lowered, s.eemingly on general principles), might be 
taken by an unfair individual, I am reluctant to believe 
that a fair-minded individual, or the Board of Educa- 
tion, would ask us to pay more rental for the property in 
question than we were compelled and willing to pay un- 
der the strict letter of our leases with the Board of Edu- 
cation. And here I wish to state, that, while we are will- 
ing to live up to the terms of our leases, at the same time, 
when said leases were made, I believe they were made 
with the intent and spirit of securing to the Board of 
Education the prevailing rate of income upon the true 
cash value of the property. 

Said leases were not made for the purpose of, at any 



285 

time, obtaining excessive rental for the property. And, 
thougii under tlie strict provisions of this lease we are 
compelled to pay six per cent. (6%) on the true cash 
value of this property, it will he noted, in the attitude 
taken by the Board of Education in their reply to the 
"Crilly" statement, that they favor a reduction of the 
value of the property by one-third, in order that the in- 
come of the properties, leased on a 6 per cent, basis, 
would equal the income of properties capitalized on a 4 
per cent, basis, now the prevailing rate of income. And 
were we to try to take advantage of this point, we would 
ask you to grant a rental of much less than that which 
we have offered you for the ensuing ten years. 

Gentlemen, in statement and letter to you of March 
25, 1905, I offered the Board of Education, on behalf 
of Mr. Blair, the sum of $10,600^ per annum, for the ten 
years commencing May 8, 1905, for the property therein 
referred to. 

I now ask you, on behalf of Minnie E. Warren, as 
trustee under the will of Charles H. Blair, deceased, 
to appraise the cash value of this property at such a 
sum, six per cent. (6%), of which will equal ten thou- 
sand six hundred ($10,600) dollars; and, on behalf of 
Minnie E. Warren, as trustee under the will of Charles 
H. Blair, deceased, I hereby offer the Board of Educa- 
tion the sum of ten thousand six hundred ($10,600) dol- 
lars per annmn, as rental for said property, for the ten 
years commencing May 8, 1905, and trust that you will 
observe in this offer a spirit of fairness to all parties 

in interest. 

Respectfully submitted, 

Minnie E. Waeeen, 

Trustee Under the Will of Charles H. Blair, Deceased. 

By H. E. McCall, 

Attorney in Fact. 



^86 



STATEMENT OF JOHN O'MALLEY, JR. 

StateiMEnt oe Rents and Expenses in Connection With 

Building, 52 to 58 West Jackson Boulevard, 

From May 1st, 1895, to May 1st, 1905. 

Rent for year ending April 30th, 1896 . $1,500.00 

Rent for year ending April 30tli, 1897 . 1,500.00 

Rent for year ending April SOtli, 1898. 1,600.00 

Rent for year ending April SOth, 1899. 1,650.00 

Rent for year ending April SOth, 1900 . 1,700.00 

Rent for year ending April SOth, 1901. 1,800.00 

Rent for year ending April 30th, 1902. 2,500.00 

Rent for year ending April SOth, 1903. 2,500.00 

Rent for year ending April SOth, 1904. 2,850.00 

Rent for year ending April SOth, 1905 . 2,056.92 

Total rent for ten years. $19,656.92 

Average yearly rent for ten years. . . . $1,965.69 

Expense Account. 

Annual ground rent. $840.00 

Taxes 135.00 

Insurance 150.00 

Repairs 200.00 

Water taxes 41.66 

Total yearly expense $1,366.66 

Net yearly income $ 599.03 

Size of school lot 50x80 feet. 

Size of entire lot 80x85 feet. 

Size of building, 80x80 feet. 

Value of building $20,000.00 

Value of O'Malley lot, 35x80 feet 3,500.00 

Total value of O'Malley holdings $23,500.00 

N. B. The O'Malley lot has no alley or no outlet, 
except through the school lot fronting on Jackson Blvd. 



287 



STATEMENT OF BOAED OF EDUCATION IN RE- 
PLY TO JOHN O'MALLEY, JR. 

To the Honorable Board of Appraisers 

of School Fund Property, 

of the City of Chicago. 
Gentlemen : — 

In the matter of the lease held by Mr. John 'Malley, 
Jr., from the Board of Education of the City of Chi- 
cago of the property situated at 52-58 Wes.t Jackson 
Boulevard, in this city, having a frontage on Jackson 
Boulevard of 80 feet by a depth of 50 feet, and being 
described as the east half of lot 1 in block 52 in School 
Section Addition to Chicago. 

The statement presented by the lessee herein is com- 
prised of a tabulation of rents and expenses for the last 
ten years, and in this tabulation are included figures on 
property other than that involved in this appraisement. 

We have no extended reply to make to Mr. 'Mal- 
ley 's statement, and are content to submit to your Hon- 
orable Body our opinion of the fair cash value of the 
feet at this time, which is at the rate of $5.25 a square 
foot, or a total value of $21,000.00, which value we deem 
a most conservative one and one which should be very 
acceptable to the lessee. 

Respectfully submitted. 

Board of Education of the City of Chicago, 

By James Maheb and 
Angus Roy Shannon, 

Its Attorneys. 



\ 



288 



STATEMENT OF JOHN O'MALLEY, JR., IN RE- 
BUTTAL. 

Chicago, April 27, 1905. 

To the Honorable Board of Appraisers 

of School Fund Property 

of the City of Chicago. 
Gentlemen : — 

We have received a copy of the report of Messrs. 

Maher and Shannon, Attorneys for Your Honorable 

Body, regarding our lease at 52 to 58 West Jackson 

Boulevard, and beg to say as follows : 

While we earnestly desire to be fair and just with 
the Board, we believe existing conditions do not justify 
the valuation placed on our holdings, and respectfully 
ask to be heard on the subject. 

Please advise us. when it will be convenient for Your 
Honorable Body to grant us such a hearing. 

Very Respectfully Yours, 

John O'Malley, Je., 
By J. 0. CosGEovE. 



289 



ESTATE MARGARET HURTZ. 

Statement of Packaed & Neice, Attorneys for Joseph 
HuRTz AND Ward B. Sawyer^ Attorney for El- 
bridge Hanecy^ Executor and Trustee of 
Margaret Hurtz, Deceased. 

To the Honorable Board of Appraisers of School Prop- 
erty of the City of Chicago: 

Gentlemen: — 

The property located at the southeast corner of Jack- 
son Boulevard and Clinton Street, Chicago, was leased 
by the Board of Education of the City of Chicago to 
Patrick Cash, by lease dated December 30, 1882, for 
fifty (50) years from May 8, 1880, at an annual rental 
of Ten Hundred and Eighty ($1,080) Dollars per annum, 
payable quarterly. The legal description of the prop- 
erty is. the west one-half (W. ^) of Lot One (1) in Block 
Fifty-two (52) in School Section Addition to Chicago. 
This lease contained a revaluation clause in the usual 
form used by the Board of Education, providing for a 
revaluation of the property on May 8, 1885, and every 
five years thereafter by three appraisers to be appointed 
by the Board of Education. The rental was to be fixed 
at each succeeding valuation as six per cent, of "the 
true cash value of the said premises above demised at 
the time of such appraisal, not taking into considera- 
tion the improvements thereon." 

This lease was subsequently, and on January 9, 1888, 
assigned by said Patrick Cash to Margaret Cash, his 
wife. 

On December 21, 1889, a certain Supplemental Lease 
was entered into between the said Board of Education 



290 

and said Margaret Cas.li, by which the term of said orig- 
inal lease was extended to May 8, 1985, subject to the 
provisions of said lease and the supplement thereto. 
The period for revaluation was also changed from every 
five years to every ten years beginning May 8, 1895. The 
minimum valuation up to the year 1915 was fixed at the 
sum of $6,400. 

It was. provided further in said Supplemental Lease 
' * That, notwithstanding anything in said lease contained, 
the appraisers shall be at hberty in forming their judg- 
ment of the value of the land, without including the value 
of the improvements thereon, to take into consideration, 
if and so far as they deem it pertinent to do so, the im- 
provements on such land, and the character, condition, 
value, cost, rental, expense and other particulars thereof, 
and any other facts or information, from whatever 
source, bearing upon the question of the actual value of 
said land." 

On January 16, 1904, the leasee, Margaret Cash, who 
had subsequently intermarried with one, Joseph Hurtz, 
and was then known as Margaret Hurtz, departed this 
life testate at Chicago, and on March 16, 1904, Letters 
Testamentary were issued to Elbridge Hanecy, as Exe- 
cutor under the Last Will and Testament of said Mar- 
garet Hurtz, deceased. That subsequently and on Octo- 
ber 7, 1904, Joseph Hurtz, the surviving husband of said 
Margaret Hurtz filed his renunciation in the Probate 
Court of Cook County, and elected to take in lieu of all 
dower, etc., one-half of all the real and personal estate 
which should remain after the payment of all just debts 
and claims against the estate of said Margaret Hurtz. 
That such is the present condition of the title to said 
leasehold estate, and that a Bill for Partition of said 



291 

leasehold estate (among other pieces of property) was 
filed by said Joseph Hurtz against said Elbridge Hanecy, 
as Executor, etc., and is now pending and undetermined 
in the Superior Court of Cook County, as case General 
No. 239696. 

On account of the death of said Margaret Hurtz, we 
have been at somewhat of a disadvantage in obtaining 
the detailed information which we desired, but ]Dresent 
herewith such facts as may be helpful to your Honorable 
Board in placing a fair and just valuation on the prem- 
ises in question. 

The, SiTtJATioN of the Property. 

The leasehold property fronts 50 feet on Clinton Street 
and has a depth of 80.25 feet on W. Jackson Boulevard. 
The 35 feet adjoining the leasehold property on Clinton 
Street on the south was owned by the said Margaret 
Hurtz in fee simple at her death. A quite considerable 
portion of the 35 feet owned in fee is used and rented 
in connection with the 50 feet leasehold property. 

The wood and brick building which now stands on this 
leasehold property was originally erected in 1871 and 
covered not only the entire leasehold property but also 
part of the 35 feet owned by the lessee in fee sample on 
Clinton Street adjoining. Subsequently the lessee added 
a small story by building a flat to be used as a living 
apartment on the west 40 feet of the leasehold property. 
The entire building is now more than thirty years old. 

The Value of the Building. 

The actual value of the building on the leased ground 
under the present circumstances, and used as it is now 



292 

in connection witli the adjoining property owned in fee 
by the lessee so that good light and air are obtainable 
for the occupants of this leasehold property, would not 
exceed Seven Thousand ($7,000.00) Dollars. If they 
were to be lemoved they would be valueless, as the cost 
of removing them would exceed the salvage. (See Affi- 
davit-Exhibit "B.") 

We have attached hereto a diagram of the two prop- 
erties and marked the same Exhibit ''A" from which 
we hope the joint use of the properties may be made a 
little more plain and understandable. 

The rental value of the leasehold property is greatly 
enhanced by the portion of the fee property built upon, 
used and rented in conection with it, for the leasehold 
property, if rented alone would only be 50 feet in depth 
for the four stores fronting on W. Jackson Boulevard. 
This would make the stores too shallow for most apy or- 
dinary business. Besides the one store, No. 60 W. Jack- 
son Blvd., extends straight back over the fee property, 
making it much more desirable for the tenant. 

The Street. 

Jackson Boulevard at the point where this building is 
located is on a steep incline leading up to the Jackson 
Boulevard bridge over the river. The street is con- 
siderable lower at the west end of the building than at 
the east end of it. That this renders the premises un- 
desirable for tenants whose business requires teaming, 
and the loading and unloading of heavily loaded wagons 
at their front doors, is apparent. The property is lo- 
cated in a wholesale district where almost every busi- 
ness house which would desire to locate there would re- 



293 

quire a large amount of teaming to be dpne and this, 
therefore, operates as a distinct disadvantage to pro- 
curing such desirable and responsible tenants as these 
wholesale dealers would make. 

The BEosrTS. 

In computing the amount of the rents for the year end- 
ing April 30, 1905 (as well as for all other years), we 
must necessarily apportion the rent between the lease- 
hold estate and the fee property by finding the total 
number of square feet in the leasehold and in the fee 
property which is rented to each tenant, and then ap- 
portioning the rent on a square foot basis. 

For the year ending April 30, 1906, the rent of the 
leasehold estate has been as follows : 

No. 60 W. Jackson Blvd., Tenant, Charles 
Hagenbucher ; Business — Saloon ; Store 
takes in East 20 feet of leasehold (20x50) 
and runs back over fee property clear to 
the alley, making total depth, 85 ft. (20x 
85) ; Pays $60 per month rent; amount 
apportioned to leasehold $ 423.90 

No. 62 W. Jackson Blvd.— Tenant, B. G. 
Paltano; Business, Restaurant; Store is 
20x60 — 10 feet being on fee property ; this 
tenant also occupies the 10 feet of the fee 
property extending back of the store 
known as No. 64; pays $50 per month; 
amount apportioned to leasehold 428.80 

Nos. 64 and 66 and entire 2nd floor of build- 
ing on west 40 feet of leasehold and ad- 
joining 10 feet of the fee property; Ten- 
ant — Allen-Hussey Co. — Business, tele- 
phones; subrents two stores; Pays $170 
per month. This building is the only one 
having a second story. We have appor- 
tioned the rent by allowing $50 per month 



294 

for the second story which is all on the 

leasehold property amounting to 600.00 

This leaves a balance of $120 per month for 
the two stores, or $60 per mo. each. The 
other inside stores rent for $60 and $50 
respectively. Apportioning this $120 per 
mo. or $1,440 per year between the lease- 
hold and the fee, there being 2,200 square 
feet in both stores, 200 square feet of 
which is on the fee property, and the 
amount earned by the leasehold portion 
would be $ 1,200.00 

Total income from leasehold $2,652.70 



Expenses During Year Ending April 30, 1905. 

Ground rent to Board of Education $1,200.00 

Taxes and Special Assessments 121.25 

Insurance — 1 year 86.34 

Repairs 48.18 

Commissions for Collecting Rent, 5% ..... . 170.50 

Total amount paid out $1,626.27 

Receipts 2,652.70 

Paid out 1,626.27 

Balance .$1,026.43 

No charge in dollars and cents has been made in the 
above apportionment between the leasehold and the fee 
properties for the benefit which the leasehold property 
derives from the fee property on account of light and 
air. The fee property is improved with only a one story 
brick building, so that the second floor of the building 
on the leasehold has no obstruction to light on its south 
side, but receives good light and air over the property 
owned in fee. This is of considerable value in renting 
the second floor of the leasehold. 



295 

The above statement shows practically nothing (only 
$48.18) has been paid out during the year for repairs. 
The agents were instructed to make no repairs during 
the last year, unless they were absolutely necessary, on 
account of the estate of Margaret Hurtz, deceased, be- 
ing in the Probate Court. The buildings have been and 
now are sorely in need of repairs. We attach hereto 
marked ''Exhibit B" the affidavit of Mr. Smith, of the 
firm of R. F. Shanklin & Co., who has had charge of the 
property during the past year and who is familiar with 
their condition. From that affidavit it is plain that at 
least the sum of $1,000 and possibly more should have 
been expended in repairs last year and must be spent 
at once in order to keep the building in a tenantable con- 
dition. The average amount necessary for repairs on 
these old wood and brick buildings to keep the same in 
tenantable condition would average from $300 to $400 
per year, conservatively stated. (See affidavit. Exhibit 
B.) Taking off the sum of $350 as an average amount 
necessary to expend each year to keep the premises in 
reasonably good condition and subtracting it from the 
balance shown of $1,026.43 and the sum of $676.43 would 
be left as the net return of the owner on his, investment 
in this leasehold property. 

On account of the depreciation of wood and brick 
buildings constructed as these buildings are, it is gen- 
erally understood that the owner or lessee should re- 
ceive at least 10% net on the value of the buildings. 

Taking the value of the buildings on the leasehold to 
be as much as the liberal estimate of Mr. Smith in his, 
affidavit attached hereto (Exhibit B), namely, $7,000, and 
it will be seen that the lessee is not deriving a net in- 
come from the buildings equal to 10% of their estimated 



296 

value. No taxes are now paid by the lessee and should 
he be required to pay taxes it would greatly lessen even 
the present small income. The amount of the taxes is 
of cours.e uncertain. 

The income from these buildings is now probably about 
as high as it ever will be, as the buildings are of course 
depreciating and becoming less tenantable every year. 
And under the present lease, with the ten year revalua- 
tion clause, no one could be expected to erect a new build- 
ing on this site, when its value might be swept away in- 
side of ten years after its erection. 

The Aggregate Rents Are Lower Now Than They Were 
Five Years Ago. 

No. 60 W. Jacks.on Blvd. has been rented at the same 
rate at which it is now rented, namely $60 per month, 
since May 1, 1895. 

No. 62 W. Jackson Blvd. was rented for $55 per month 
from May 1, 1900, to May 1, 1902; then it was vacant 
for two or three months ; then rented for $55 per month 
again for awhile, and it is now rented at $50 per month, 
which is less than the premises brought in 1900'. 

Nos. 64 and 66 W. Jackson Blvd. and the entire upper 
floor was rented from May 1, 1899, to May 1, 1902, at 
$180 per month; it was then vacant for two or three 
months; and then was rented to May 1, 1905, for $170 
per month, which is its present rent, and which is $10 
per month less than the same premises brought in 1902. 

We have not apportioned these amounts so as to show 
the amount paid for the leasehold and the fee, but it will 
be seen that the aggregate rents for the premises are 
lower by at least $15 per month, than they were three 



297 

years ago, and are $5 per month lower than they were five 
years ago. 

The value of the leasehold property to the tenant de- 
pends mainly upon the rent, and as this is decreasing, 
instead of increasing, even in the present prosperous 
times, it must be on account of the poor location of the 
property and the age and undesirable character of the 
buildings located thereon. 

If the lessee could be adequately protected in making 
the investment, the proper thing to do would be to erect 
a new building and thus increase the income, but under 
the present leas.e with its ten year revaluation clause 
such a large investment would not be consistent with 
good business principles. 

Taxes^An Increased Burden of the Lessee. 

We desire to call the Board's attention to the recent 
ruling of the Supreme Court of Illinois, holding the fee 
of all school property to be subject to taxation. Con- 
sider for a moment the effect upon the tenant of the 
property in question, if he should be compelled to pay 
taxes on the fee of this property out of the small bal- 
ance remaining as. his net income from the property, as 
by his lease he is obliged to do should any taxes be as- 
sessed thereon. 

At the time this property was leased it was supposed 
by both parties to the lease that the fee was not subject 
to taxation. The rent was fixed with this, idea in mind. 
Out of abundant caution and for the complete protec- 
tion of the Board of Education a provision was inserted 
in the lease requiring the lessee to pay all taxes that 
might be assessed against the property. 



298 

When the last revaluation was made in 1895 the same 
conditions existed, and the rent was fixed for the suc- 
ceeding ten years, with the idea in mind that the fee was 
not and would not be subject to taxation. 

Now it appears that the lessee is liable to have to pay 
a considerable amount in taxes on this leasehold prop- 
erty which heretofore both he and the Board of Educa- 
tion have considered and treated as exempt property. 

Under the circumstances the rents have decreased, and 
the building of course decreasing in value, we submit to 
your Honorable Board that if any change is made in the 
amount of the present rental value of $1,200 per year 
for the next term of ten years, under the present lease, 
it should be a reduced amount to meet this unforeseen 
tax burden, rather than an increased rental. 

The Value of a Straight Ninety-Nine Year Lease, 
Without the Revaluation Clause, as Com- 
pared With the Present Lease. 

In the present condition of things this leasehold in- 
terest must be sold in the immediate future. Its value 
under the present lease is very doubtful. We do not 
know that it could be sold for any substantial amount on 
account of the revaluation clause. 

If the Board of Education would consent to the inser- 
tion of a clause in the lease giving a straight annual 
rental for the whole balance of the term at an increased 
amount over the present rental, upon the erection by 
the lessee or assigns of a substantial building on the 
premises, say not to cost less than the sum of $20,000.00, 
to be contructed within five years from date, such a 
change and such an increased rental would be welcomed. 



299 

Then the leasehold interest would have stability and 
could be sold for something substantial. An investment 
could be made which would pay the lessee a fair return 
for his money and trouble, provided the fixed annual 
rental was not made too large. 

The lessee would be enabled to figure with a reason- 
able degree of certainty what could be made on his in- 
vestment. The lessee could then negotiate leases, with 
responsible tenants for a long period of time, whereas 
he is now precluded from so doing; and during the last 
two or three years of each ten year period, his leases 
must be necessarily of very short duration s.o as not to 
have them run beyond the ten years. The most desirable 
class of tenants are thus lost. As the lease stands now, 
computation on known quantities can only extend for a 
period of somewhat less, than ten years ; after that he is 
af the mercy of his landlord, and is not sure of any- 
thing. Valuable improvements cannot be expected to be 
made under such circumstances. 

And then, looking at the matter from the standpoint 
of the Board of Education, if such a clause were inserted, 
would they not be benefited also 1 

As the matter stands now, the lessor's, security for the 
carrying out of the lessee's provisions consists of old 
wood and brick buildings of very small value. 

If such a provision could be agreed upon, and the 
lessee should erect a $20,000' building within the time 
specified, the security of the Board of Education would 
amount to something if the tenant should fail to pay his 
rent. 

Which is better from the standpoint of either the les- 
sor or the lessee? 



300 

But if such a clause cannot be procured at this time, 
then we submit to this Honorable Board of Appraisers,, 
that the present valuation of $1,200 per annum is even 
higher than it should be, considering that the rents from 
the building are lower than they were five years ago, 
and considering the impending tax burden now confront- 
ing the lessee, which last named hardship is as yet un- 
certain in amount. 

No buyers for the property have as yet been procured 
on the present rental and we fear should there be even 
a small increase that the leasehold estate would bring 
practically, nothing when sold at forced sale, as it must 
be within a few months. 

We ass.ume that the Board will take into considera- 
tion the possibility of lessee's sustaining loss by reason 
of the non-payment of rent from vacancies, which are 
contingencies which must always be taken into account 
in estimating the value of real estate. 

We, therefore, respectfully request that under the cir- 
cumstances shown the annual rental ought to be reduced 
to the sum of $1,080 (which was the amount of the rental 
paid under the old lease), especially because of the taxes 
which in all probability lessee will be compelled to pay 
during the next ten years. 

E^espectfully submitted, 

Packard & Neice, 
Attorneys for Joseph Hurtz. 

Waed B, Sawyer, 
Attorney for Elbridge Hanecy, Executor of the Will of 
Margaret Hurtz, Deceased. 



301 

"Exhibit B." 

State of Illinois, / 
County of Cook. f 

Royal D. Smith, being first duly sworn, deposes, and 
says that lie is the manager of the Renting Department 
of Shanklin & Company, doing business in the Portland 
Block, in the City of Chicago, County of Cook and State 
of Illinois, and for many years last past has been in 
the renting business in said City, and that for the past 
year he has had the pers.onal management of the lease- 
hold interest belonging to the Estate of Margaret Hurtz, 
deceased, on the School property at 60 to 66 West Jack- 
son Boulevard, in the City of Chicago aforesaid, of which 
estate Elbridge Hanecy is the Executor. 

Affiant further says that the said real estate is im- 
proved by two one-story buildings, partly wood and partly 
brick, and one two-story building, partly wood and partly 
brick, and that the same are over thirty-three years old. 
That all of said buildings, are in very bad repair and 
that in order to put the same in fairly good condition it 
would be necessary to make the following repairs : The 
exterior should receive at least two coats of paint and 
the brick work should be pointed up. New chimneys, en- 
tirely new roofs, gutters and down-spouts should be 
placed on all of said buildings, and the interior must be 
replastered and repainted and considerable new wood- 
work is. necessary. The basement needs a thorough over- 
hauling and is urgently in need of new sewerage and 
proper drain pipes. Cement floors should also be placed 
in the stores, which in the one-story building would ne- 
cessitate entirely new sewerage, and the store fronts 
need to be entirely replaced by new ones, necessitating 



302 

the putting in of considerable new iron work and plate 
glass. 

Affiant further s.ays that in his opinion the expense of 
the above needed repairs would aggregate approximately 
the sum of One Thousand ($1,000.00) Dollars. He fur- 
ther says that during the past year, during which he 
has had charge of the premises, he has avoided spending 
anything for repairs so far as possible, because the same 
were in an estate where there was. considerable friction 
and litigation between the parties interested and that if 
the same were placed in repair as above stated the aver- 
age yearly repairs needed on buildings in the condition of 
these Avould probably aggregate between Three and Four 
Hundred Dollars. 

Affiant further says that the actual value of the build- 
ings of said leasehold property in his opinion is about 
Seven Thousand ($7,000.00) Dollars, and that if they 
were to be removed they would be valueless., as the cost 
of moving would, in his opinion, exceed the salvage. 

Affiant further says that said buildings are set on 
posts and could not be moved except by tearing them 
down. 

And further affiant saitli not. 

(Signed) Eoyal D. Smith. 

Subscribed and sworn to before me this 13tli day of 

April, A. D. 1905. 

(Signed) Waed B. Sawyee, 

[seal] Notary Public. 



303 



EEPLY OF BOAKD OF EDUCATION TO STATE- 
MENT ON BEHALF OF HURTZ ESTx^TE. 

To the Honorable Board of Appraisers 

of School Fund Property, 

of the City of Chicago. 
Gentlemen : — 

In the matter of the lease held by the Estate of Mar- 
garet Hurtz, deceased, from the Board of Education of 
the City of Chicago of the property situated at the south- 
east corner of Jackson Boulevard and Clinton Street, in 
said city, having a frontage of 80i feet on Jackson Boule- 
vard and 50 feet on Clinton Street, being described as 
the west half of Lot 1 in Block 52 in School Section Ad- 
dition to Chicago. 

The lessee herein has filed an extended statement by 
Messrs. Packard & Neice, Attorneys for Joseph Hurtz, 
husband of the deceased, and Ward B. Sawyer, Attorney 
for Elbridge Hanecy, Executor and Trustee, etc. The 
entire statement is composed of arguments on the value 
of the leasehold, and nothing therein contained throws 
any light upon the value of the fee exclusive of the im- 
provements. 

In the statement is set forth the desirability of a 
straight 99 year lease over that now covering the prop- 
erty in question, but all reference thereto is irrelevant 
to the issue to be decided by you and, therefore, we make 
no reply to it. 

We do not care to take up the question of the char- 
acter of the buildings and the management thereof, as 
tlie same is done by the lessee's representatives, and, be- 
lieving your Honorable Body is fully conversant with 



304 

our general position in reference to all the matters con- 
tained in the statement furnished herein, we content our- 
selves with expressing to you our opinion of the present 
value of the fee, which is $7.50 per square foot, or a total 
of $30,000.00. Should you appraise the property at this 
figure, we believe that the interests of the lessee would 
be amply cared for, and that the Board of Education 
would be receiving the minimum rent it should be en- 
titled to for this valuable manufacturing property. 

Respectfully submitted, 

Board or Education or the City of Chicago, 
By James Maher and 
Angus Roy Shannon, 

Its Attorneys. 

ESTATE MARGARET HURTZ. . 

Statement in Rebuttal. 

To the Honorable Board of Appraisers 

of School Property of the City of Chicago. 

Gentlemen : — 

The Board of Education of the City of Chicago by its 
attorneys has filed a reply to our statement which we 
filed April 13, 1905. 

We s.ubmit to this Honorable Board that the argu- 
ments used in our original statement showing the use 
of this property in connection with the adjoining 35 feet 
owned by the Hurtz estate in fee does have a very ma- 
terial bearing on the value of the fee exclusive of the 
improvements, and that counsel for the Board of Educa- 
tion has missed the force of such arguments. The prop- 
erty fronts eighty (80) feet on Jackson Blvd., and fifty 



305 

(50) feet on Clinton Street. It does, not abut upon an 
alley on either the east or south sides, but the east and 
south sides are entirely surrounded by private property. 
Without the adjoining thirty -five (35) feet owned in fee 
by this estate, it would be entirely deprived of light and 
air from either the east or south sides. It seems to us 
that its use in connection with the property owned in 
fee does have a most material effect not only upon the 
value of the leasehold, but also upon the value of the fee. 
The property owned by the Board of Education and 
upon which the valuation is to be placed is only fifty 
(50) feet deep and we think that the characterization of 
this property as "valuable manufacturing property," 
made by counsel for the Board of Education, would be 
entirely unwarranted, if it had to be used alone and not 
in connection with adjoining property. 

We believe that all the arguments used in our state- 
ment are material and relevant to the question of the 
value of the fee, although the argument as to the desira- 
bility of a straight ninty-nine (99) year lease, we pre- 
sume would be more appropriately addressed to the 
Board of Education than this. Honorable Board of Ap- 
praisers. 

We submit, however, that in any view of the situation 
the value of the fee suggested by counsel for the Board 
of Education is wholly unwarranted and is exorbitant 
and excessive. They make no showing of facts which 
would even tend to justify the belief that the value of 
this property has increased fifty per cent (50%) since 
1895. We know of no facts which would tend to show 
that this real estate has increased at all in value since 
its last revaluation. On the contrary, we have shown in 
our Statement heretofore filed that the rentals from this 



306 

property are less now than they were five years ago. 
This, we insist, is one of the controlling elements in the 
value of the fee of this property in question. Even if 
the value of the fee of the property in question has not 
actually decreased, still it certainly has not increased 
in value, and we contend that on account of the changed 
circumstances by which the lessee will be compelled to 
pay taxes on the fee in the future, that the rental should 
be reduced to the sum of Ten Hundred and Eighty 
($1,080) Dollars per annum, which would be six per cent. 
(6%) on a valuation of Eighteen Thousand ($18,000) 
Dollars, or four and 50/100 ($4.50) Dollars per square 
foot. Under present conditions we believe this would 
be a fair and equitable arrangement for both lessor and 
lessee. 

Respectfully submitted, 

Packaed & Neice, 
Attorneys for Joseph Hurts. 

Waed B. Sawyee, 
Attorney for Elhridge Hanecy, Executor of the. Will of 
Margaret Hurts, Deceased. 

STATEMENT OF KAND, McNALLY & CO. 

Chicago, March 27, 1905. 
Messrs. John McLaren, 

William D. Kerfoot, 
Arba N. Waterman, 

100 Washington St., City. 
Gentlemen : — 

In reply to your communication of the 8th inst. con- 
cerning the re-appraisal of the north one-half lot 10', block 
113, School Section Addition to Chicago, as is provided 



307 

in the lease and supplemental lease of said one-half lot 
10, from the Board of Education of the City of Chicago, 
we beg to say; 

That the supplemental lease made and entered into 
15th day of June, 1885, between the Board of Education 
of the City of Chicago and Thomas Mackin provides in 

Article ' ' Foueth : That no appraisal to be made 
at any time under said lease, or this supplement 
thereto, for the purpose of ascertaining and fixing 
the amount of the annual rent to be paid thereunder 
for any portion of the period prior to May 8, A. D. 
1915, shall be operative or binding upon the parties 
hereto for any purpose, in the value of the demised 
land thereby be found or fixed at a less sum than 
$5,000.00 (the same being 80% of the appraised 
value of said land as found by said appraisement of 
1885) ; but in such case, such appraisal shall be dis- 
regarded, and the said sum of $5,000.00 shall be 
adopted and accepted in lieu thereof, as the value of 
said demised land, for the purpose of fixing the 
rental thereof for the next succeeding ten years, 
with the same etfect as if it had been the value found 
and reported by the appraisers. 

"The appraisement to be made in the year 1915, 
shall not, nor shall any subsequent appraisement be 
subject to the minimum valuation clause contained 
in this Article Four." 

Our understanding of this Article Four in the sup- 
plemental lease herein quoted is. that the present valua- 
tion of $5,000.00 is to continue and be in effect until 1915, 
which would be no increase in the rental for the next 
period. 

The justice of this position can be seen by an exami- 
nation of the enclosed plat showing the isolated location 
of the said north half of lot 10'. It is separated from 
any other property we control, the improvement is taxed 
upon a valuation of $5,000.00, taxes for 1903 were $292.65. 



308 

The improvements are of such a nature that is very dif- 
ficult to get much return from same. Good tenants can- 
not he obtained, and when rented at all the best we can 
do is a rental of $185.00 per month. Special assessments, 
regular taxes, and annual rental to the School Board, 
with other attending necessary expenses, leaves us no 
return from the property, and the lease, having in it this 
revaluation clause almost precludes the idea of ever put- 
ting upon the property a more substantial improvement. 

We believe your judgment will be that we are now pay- 
ing a sufficient annual rental, especially is this so in view 
of the recent court decision that the ground itself be as- 
sessed for taxation, and that you will allow it to stand 
for another term at the present rate. 

Yours very truly. 

Rand, McNally & Co. 

Eand, McNally & Co. 's Business Statement 
Of the Property 

North half of lot 10, block 113, School Section Addition 
to Chicago, Year ending April 30, 1905. 

Debits Credit 

State, County and Entire rental of 

City Taxes $ 319.55 property, $185.- 

Rent of wall on 00 per month 

north line 150.00 (12 months) .... $2,220.00 

Rent paid School Deficit 314.53 

Board 1,500.00 

Insurance (on $4,- $2,534.53 

500.00) 54.98 

6% int. on $8,- 

500.00, cost of 

four-story brick 

bldg 510.00 



'&• 



$2,534.53 



309 



STATEMENT OF WACKER & BIRK BREWING & 
MALTING CO. 

The Honorable The Board of Appraisers of School Fund' 

Land : 
Gentlemen : — 

In reference to the School F'und property, which we 
lease, being the North Half Lot Fourteen, Block 60, Rus- 
sell Mather and Roberts' Addition to Chicago, we beg 
to state that we consider the present rental too high in 
view of recent s.ales in the immediate neighborhood. 

We understand that three lots have been sold recently 
almost directly across Desplaines Street, each 40x150 feet, 
two of them vacant, for $7,500, and one with frame build- 
ing for $4,200. 

Hoping you will consider the matter favorably, we 

remain. 

Respectfully yours, 

Wackek & BiRK Beewing Co. 

Adam Oe.tseifen_, Pres. 

STATEMENT OF BOARD OF EDUCATION IN 

REPLY. 

To the Honorable Board of Appraisers of School Fund 
Property of the City of Chicago: 

Gentlemen : — 

In the matter of the lease held by Wacker & Birk Brew- 
ing and Malting Company from the Board of Education 
of the City of Chicago of the property situated on the 
east side of Desplaines street between Austin avenue 
and Indiana street, having a frontage of 20 feet by a 



310 

depth of 150 feet, described as the North half of Lot 14 
in Block 60 in Eussell, Mather & Roherts' Addition to 
Chicago. 

The lessee of the above described property has deemed 
it expedient to simply write an informal letter to your 
Honorable gody, suggesting that the present rental value 
is too high, and citing the sale of three lots directly oppo- 
site this property, on the s.ame street, at prices which 
approximate $3,750.00 per 20-foot lot. 

Under all the circumstances and conditions existing in 
that locality, we believe there is warranted a moderate 
advance in the value of this fee over that held by it ten 
years ago, but submit to your Honorable Body that it 
would be absolutely impossible to reduce the rental by 
reason of reducing the price of the fee under the condi- 
tions now existant. 

Respectfully submitted, 

BOAED OP EDUCATIOlSr OF THE CiTY OF ChICAGO, 

By James Mahee and 
Angus Eoy Shannon, 

Its Attorneys. 



311 



REPORT OF APPRAISERS. 

Proceedings of Board of Education After Report of 

Appraisers. 
At a meeting of the Board of Education held June 7, 
1905, the following business was transacted : 

The Secretary presented the following communication 
from the President of the Board: 

Chicago, May 26, 1905. 
To the Board of Education, City of Chicago: 

Ladies and Gtentlemen : — 

I enclose herewith report of the Appraisers of School 
Fund Property, under date of May 24th, which came to 
hand this morning. 

Yours very truly, 

Clayton Mark, 

President. 

To the President and Members of the Board of Educa- 
tion of the City of Chicago and the Various Lessees of 
School Fund Property in the City of Chicago: 

Gentlemen : — 

The undersigned, John MacLaren, William D. Kerfoot 
and Arha N. Waterman, duly appointed appraisers un- 
der the terms of certain supplementary leases made be- 
tween the Board of Education of the City of Chicago 
and certain lessees under said leases, having qualified by 
subscribing to, and making oath, each for himself and 
with each other, to appraise and determine the true cash 
value at this date of certain demised lands hereinafter 
named, exclusive of the improvements thereon, beg leave 
to report that on the 24th day of March last they caused 



312 

a notice of their appointment to be sent by mail to each 
of the lessees, or their representative at their last ad- 
dress furnished to said lessor ; that in response to such 
notice written arguments or statements have been made 
to such appraisers, and written answers and statements 
in reply have been made by the lessors, and either writ- 
ten or oral arguments or statements in reply have been 
made by lessees, that with these statements and other in- 
formation and facts secured by said appraisers they have 
fixed and determined the true cash value, exclusive of im- 
provements,, at the time of this appraisal, of the follow- 
ing described lots and parcels of land to be as follows, 
viz.: 

Of the South 264 ft. of Lot 207, Bronson's Addition 
to Chicago, also known as N. E. Corner Division and 
Sedgwick Streets, leased by the Board of Education, to 
be Seventy-one Thousand Six Hundred and Ninety-five 
Dollars ($71,695.80) Eighty Cents. 

Lots Two (2) to Six (6), Block 1, School Section Addi- 
tion to Chicago, also known as 166-182 W. Madison 
Street, leased by the Board of Education to C. H. Blair, 
to be Seventy-five Thousand Dollars ($75,000.00). 

Lots seven (7), eight (8) and nine (9), Block 1, School 
Section Addition to Chicago, also known as S. E. Corner 
Madison and Halsted Streets, leased by the Board of Ed- 
ucation to C. H. Blair, to be Sixty-three Thousand Seven 
Hundred and Fifty Dollars ($63,75,0.00). 

Lots eleven (11) to fifteen (15), Block 1, School Sec- 
tion Addition to Chicago, also known as 80-88 S. Halsted 
Street, leased by the Board of Education to C. H. Blair, 
to be Fifty-two Thousand Five Hundred Dollars ($52,- 
500.00). 



313 

Lots sixteen (16) to eighteen (18), Block 1, School Sec- 
tion Addition to Chicago, als.o known as 90-94 S. Halsted 
Street, leased by the Board of Education to C. H. Blair, 
to be Twenty-six Thousand Two Hundred and Fifty Dol- 
lars ($26,250:00). 

Lots Nineteen (19) and Twenty (20), Block 1, School 
Section Addition to Chicago, also known as 96-98 S. Hal- 
sted Street, leased by the Board of Education to C. H. 
Blair, to be Twenty-seven Thousand Seven Hundred For- 
ty-two Dollars and Fifty Cents ($27,742.50). 

Lot Ten (10), Block 1, School Section Addition to Chi- 
cago, also known as 78 S. Halsted Street, leased by the 
Board of Education to Thomas Coughlan, to be Ten 
Thousand Dollars ($10,000). 

Lot Twenty-one (21), Block 1, School Section Addi- 
tion to Chicago, also known as 155-177 W. Monroe Street, 
leased by the Board of Education, to be Ninety-six Thou- 
sand One Hundred Seventy-two Dollars and Twenty-six 
Cents ($96,172.26). 

E. 1 Lot One (1), Block 52, School Section Addition to 
Chicago, also known as 52-58 W. Jackson Boulevard, 
leased by the Board of Education to John O'Malley, Jr., 
to be Twenty Thousand Dollars ($20,000). 

W. i Lot One (1), Block 52, School Section Addition 
to Chicago, also known as 60-66 W. Jackson Boulevard, 
leased by the Board of Education to Estate of Margaret 
Hurtz, to be Thirty Thousand Dollars ($30,000). 

N. -I Lot ten (10), Block 113, School Section Addition 
to Chicago, also known as 330 South Clark Street, leased 
by the Board of Education to Rand, McNally & Com- 
pany, to be Thirty-seven Thousand Five Hundred Dol- 
lars. ($37,500.00). 



314 

S. i Lot 10, Block 113, School Section Addition to Chi- 
cago, also known as 332 South Clark Street, leased by 
the Board of Education to C. W. Lasher, to be Thirty- 
seven Thousand Five Hundred Dollars ($37,500). 

Lot Three (3), Block 142, School Section Addition to 
Chicago, also known as 136 South State Street, leased 
by the Board of Education to Jacob L. Kesner, to be 
Three Hundred Sixty Thousand Dollars ($360,000). 

Lot Seven (7), Block 142, School Section Addition to 
Chicago, also known as 146 South State Street, leased by 
the Board of Education to Estate of Henry Weil, and to 
Estate of George Rounsavall, Thomas G. Field, Trus.tee, 
to be Three Hundred Twelve Thousand Dollars ($312,- 
000). 

Lot Eight (8), Block 142, School Section Addition to 
Chicago, also known as 148 South State Street, leased by 
the Board of Education to Rosalie Cavanna, H. 0. Stone 
& Co., Agents, to be Three Hundred Twenty-four Thou- 
sand Dollars ($324,000). 

Lots Nine (9), Ten (10), and Eleven (11), Block 142, 
School Section Addition to Chicago, also known as 78- 
84 Madison Street, leased by the Board of Education to 
McVicker Theatre Co., to be Eight Hundred Ninety-six 
Thousand Two Hundred Eighty Dollars ($896,280). 

Lots. Eighteen (18) and Nineteen (19), Block 142, 
School Section Addition to Chicago, also known as 151- 
153 Dearborn Street, leased by the Board of Education 
to James K. Sebree, to be Three Hundred Eighty-four 
Thousand Dollars ($384,000). 

Lots Twenty (20) and Twenty-one (21), Block 142, 
School Section Addition to Chicago, also known as 155- 
157 Dearborn Street, leased by the Board of Education 



315 

to Estate of Alice Cliambers and Ava W. Farwell, J. A. 
Farwell, Agent, to be Three Hundred Eighty-four Thou- 
sand Dollars ($384,000.00). 

South 8 feet of Lot Twenty-three (23) and all of Lots 
Twenty-four (24) to Twenty-seven (27)^ inclusive. Block 
142, School Section Addition to Chicago, als.o known as 
167-171 Dearborn Street, leased by the Board of Educa- 
tion to Daniel F. Crilly, to be Nine Hundred Ninety-eight 
Thousand Four Hundred Dollars ($998,400). 

Lots Thirty-one (31) and Thirty-two (32), Block 142, 
School Section Addition to Chicago, also known as 150- 
152 South State Street, leased by the Board of Education 
to Stumer, Rosenthal & Eckstein, to be Six Hundred 
Thirty-six Thousand Dollars ($636,000). 

Lot Thirty-three (33), Block 142, School Section Addi- 
tion to Chicago, also known as 154 South State Street, 
leased by the Board of Education to Estate of George B. 
Jenkinson, Newark, N. J., to be Three Hundred Thou- 
sand Dollars ($300,000). 

Lot Thirty-four (34), Block 142, School Section Addi- 
tion to Chicago, also known as. 156 South State Street, 
leased by the Board of Education to A. Bishop & Co., 
to be Two Hundred Eighty-eight Thousand Dollars 

($288,000). 

N. 1 Lot Fourteen (14), Block 60, Eussell, Mather & 
Roberts' Addition to Chicago, also known as 163 N. Des- 
plaines Street, leased by the Board of Education to 
Wacker & Birk Brewing Co., to be Three Thousand Dol- 
lars ($3,000). 

Respectfully submitted, 

(Signed) John McLaeen, 
(Signed) William D. Kerfoot, 
(Signed) Aeba N. "Waterman, 

Appraisers School Fund Property. 



316 

On motion the report was received and ordered printed 
in the Proceedings- 
Proceedings of Board, June 7, 1905, pp. 718-19. 

Proceedings oe Board of Education Eelating to For- 
feiture OF Leases. 

At a meeting of Board of Education, held June 21, 
1905, the Secretary presented the following communica- 
tion and resolution from the President : 

Chicago, June 21, 1905. 

To the Board of Education, City of Chicago. 

Ladies and GtENtlemen : — 

The following lessees of school fund property, located 
in Block 142, bounded by State, Monroe, Dearborn and 
Madison Streets; Jacob L. Kesner, Estates of Henry 
Weil and George Rounsavell, Rosalie Cavanna, Mc- 
Vicker Theatre Company, James K. Sebree, Estate of 
Alice F. Chambers and Ava W. Farwell, Daniel F. Crilly, 
Stumer, Rosenthal & Eckstein, Estate of George B. Jen- 
kinson, and A. Bishop & Co., and Rand, McNally & Co. 
and Charles W. Lasher, lessees of property located on 
South Clark Street, near Harrison Street, have failed 
and neglected to pay the quarter-yearly installment of 
rent due for the quarter beginning May 8, 1905, as fixed 
and determined by the ground values placed on such 
properties by the Board of Appraisers duly appointed to 
fix such values in accordance with the terms of their re- 
spective leases. 

I understand it is alleged by these lessees that the val- 
ues placed by the Board of Appraisers in May, 1905, on 
the respective properties held by them, are too high, con- 



317 

sidering that the leases call for a rental equal to six per 
cent, per annum on such ground values. I am firmly of 
the opinion that the claims of these lessees are not well 
founded, and that the ground values fixed by the Board 
of Appraisers in May, 1905, are fair and equitable, and 
that the rental of six per cent, on said ground values as 
fixed according to the terms of the leases is reasonable, 
and as low or lower than current transactions of like 
property within the past few years. I am satisfied that 
the Board of Education would have no difficulty in leas- 
ing any of these properties at the present time at the 
rental just fixed, or even higher, were the property free 
to be Jeased to-day. One of the lessees in Block 142 had 
given an option to another party to buy at a considerable 
bonus the leasehold interest of said lessee's holdings. 
The party holding s.aid option has informed me since the 
findings of the Board of Appraisers that he was willing 
to take over and assume the covenants of the leases and 
pay the rental now fixed, but that he would not pay any 
bonus to present lessee for his interest in said lease. 
This proves that the values fixed by this last appraise- 
ment are fair and reasonable, but the appraisal has taken 
the speculative values out of the leaseholds. It was never 
contemplated by the original contracts that these lease 
holdings should have any such values, or that the lessees 
should be assured of values which would give them a con- 
siderable margin between the current market price for 
rentals of like property and the rentals which they were 
to pay. There is no good reason existing in my mind 
why any concessions should be made which would permit 
these lessees to exploit or speculate with their leaseholds 
to the detriment of the school fund. I am of the opinion 
that these lessees, or at least some of them, have deter- 



318 

mined to refuse to pay the rental as now fixed with a 
view to harrassing the Board of Education by litigation 
and keeping it out of the us.e of its funds as long as 
same can be done by reason of the law's delay, in the 
meantime using the property without paying rent and 
collecting and appropriating to their own use the rents 
received from their subtenants, for the purpose of en- 
deavoring to induce or coerce the Board of Education 
to either make new leases at a lower rate, and thus en- 
able the present lessees to sell their leasehold interests 
for a large bonus, or to pay the present lessees a bonus to 
surrender their leases, so that the Board of Education 
may be able to make leases with parties who stand ready 
to pay full value. The Board's past experience in tem- 
porizing and delays in dealing with lessees has always 
resulted in loss to the school fund. In one ins.tance with- 
in the last ten years a lessee had the free use of a piece of 
property for four or five years during the course of liti- 
gation, the lessee having no personal responsibility, and 
the building on the property being of little or no value. 
Under the leases, the Board of Education has two reme- 
dies : to enforce the collection of the rent under the cove- 
nants of the leases, or to declare the leases forfeited and 
at an end by reason of the failure of the lessees to per- 
form the covenants of the leases. 

In view of all these circumstances and conditions, I 
believe that the best course for the Board of Education 
to take is to declare the leases forfeited and at an end, 
and I therefore recommend that your honorable body 
adopt the attached resolution. 

Very respectfully, 

(Signed) Clayton Mark, 

President. 



319 



RESOLUTION. 

Whereas, certain lessees of school fund property, 
namely: Rand, McNally & Co., Chas. W. Lasher, Jacob 
L. Kesner, Estates of Henry Weil and George Rounsa- 
vell, Rosalie Cavanna, McVicker Theatre Company, 
James K. Sebree, Estate of Alice F. Chambers and Ava 
W. Farwell, Daniel F. Crilly, Stumer, Rosenthal & Eck- 
stein, Estate of Geo. B. Jenkinson and A. Bishop & Co. 
have failed and neglected to pay the quarterly rental as 
determined and fixed by the appraisement made in May, 
190'5, under the terms of their leases with the Board of 
Education for the quarter beginning May 8, 1905. 

Therefoee, be it resolved, That upon the failure of 
any of said lessees to pay the quarterly installment of 
rent now due on or before the 26th day of June, A. D. 
1905, the lease or leases of such lessees so failing to pay 
be forfeited and determined under the terms of said 
leases for failure to comply with the covenants therein 
contained, and that the Secretary of the Board of Edu- 
cation be authorized, empowered and directed to s.erve, 
or cause to be served, any and all notices required to be 
served on said lessees for the purpose of enforcing such 
forfeiture and that the attorney for the Board of Edu- 
cation be ordered and directed to institute any and all 
legal proceedings that may be necessary for the purpose 
of making such forfeiture effectual. 

Motion that resolution be adopted: 

Yeas— 19. 

Noes — None. 

Proceedings of Board, July 6, '04, to June 21, '05, pp. 
749-50. 



320 



FoEM OF Notice Sent Each Lessee in Conformity with 
THE Resolution Passed by the Board. 

To : 



You are hereby notified that on, to wit : the 21st day of 
June, A. D. 1905, the Board of Education of the City of 
Chicago, at its regular meeting, adopted the following 
resolution : 

''Whereas, certain lessees of School Fund Property, 
namely : Rand, McNally & Company, Charles W. Lasher, 
Jacob L. Eesner, Estates of Henry "Weil and George 
Rounsavell, Rosalie Cavanna, McVicker Theatre Com- 
pany, James K. Sebree, Estate of Alice F. Chambers and 
Ava W. Farwell, Daniel F. Crilly, Stumer, Rosenthal & 
Eckstein, Estate of George B. Jenkinson and A. Bishop 
& Company, have failed and neglected to pay the quarter- 
yearly rental as determined and fixed by the appraise- 
ment made in May, 1905, under the terms of their leases 
with the Board of Education for the quarter beginning 
May 8, 1905. 

Therefore, be it resolved, That upon the failure of 
any of said lessees to pay the quarterly installment of 
rent now due, on or before the 26th day of June, A. D. 
1905, the lease or leases of such lessees so failing to pay 
be forfeited and determined under the terms of said 
leases for failure to comply with the covenants therein 
contained, and that the Secretary of the Board of Edu- 
cation be authorized, empowered and directed to serve, 
or cause to be served, any and all notices required to be 
served on said lessees for the purpose of enforcing such 
forfeiture, and that the attorney for the Board of Edu- 
cation be ordered and directed to institute any and all le- 



321 

gal proceedings that may be necessary for the purpose 
of making such forfeiture effectual. ' ' 

And you are further notified that after the expiration 
of sixty (60) days from the date of the service of this 
notice upon you, and in consequence of your default in 
paying the rent due on the premises now occupied by 

you, being , 

your rights therein and thereto shall cease and be deter- 
mined, and the lease between you and the Board of Edu- 
cation of the City of Chicago covering the aforesaid 
premises and under which you occupy the same, shall be 
forfeited, determined and ended, and you are further no- 
tified to quit and deliver up possession of said premises 
to the said Board of Education within sixty (60) days 
from the day of , A. D. 1905. 

Dated in Chicago, Illinois, this 28th day of June, A. D. 

1905. 

BoAED OF Education of the. City of Chicago. 

By , 

Secretary. 

Service of a copy of the foregoing notice is accepted 
this day of , A. D. 1905. 



Protests Against Appeaisement of School Fund 

Property. 

At a meeting of the Board of Education held June 21, 
1905, the Secretary presented the protests from lessees 
of school fund property on the recent appraisement on 
property leased from the Board of Education : 



322 

Louis M. Stumer, lessee of Lot 32, in Block 142, of 
School Section Addition. 

Charles W. Lasher, lessee of premises known as south 
half of Lot 10, Block 113, School Section Addition. 

James K. Sebree, leasee of Lots 18, 19, Block 142, 
School Section Addition. 

E. J. Eounsavell, on behalf of Estate of Henry Weil, 
and the Estate of George Eounsavell, owners of lease- 
hold estate in Lot 7, Block 142, School Section Addition. 

A. Bishop & Co., lessee of Lot 34, in Block 142, School 
Section Addition. 

Jacob L. Kesner, lessee of Lot 3, in Block 142, School 
Section Addition. 

Benjamin J. Eosenthal and Louis Eckstein, lessees, of 
Lot 31, Block 142, School Section Addition. 

Eosalie Cavanna, lessee of Lot 8, in Block 142, School 
Section Addition. 

Oliver & Co., agents for Estate of George B. Jenkin- 
son, owner of leasehold interest in Lot 38, in Block 142. 

Daniel F. Crilly, lessee of South eight feet of Lot 23 
and all of Lots 24, 25, 26 and 27, Block 142, School Sec- 
tion Addition. 

The McVicker Theater Company, lessee Lots 9, 10 and 
11, Block 142, School Section Addition. 

Ava W. Farwell, les.see of Lots 20, 21, in Block 142, 
School Section Addition. 

Proceedings of Board, July 6, '04, to June 21, '05, p. 
750. 



323 



The following written protests and objections were 
filed to the appraisal as returned by the appraisers : 

Estate of Geo. B. Jenkinson, 
Estate of Henry Weil, 
Estate of Geo. Rounsavell, 
Benj. J. Rosenthal, 
Louis Eckstein, 
Louis M. Stumer, 
Jacob L. Kesner, and 
A. Bishop & Co. 

Filed their separate written protest and objection to 
the said appraisal, each of said protests and objections 
being the same, except as to the description of the prop- 
erty to which it relates. One of said protests is in the 
words and figures following: 

Chicago, III., June 21, 1905. 

To the Board of Education of the City of Chicago: 

The undersigned, Benjamin J. Rosenthal and Louis 
Eckstein, lessees of Lot 31 in Block 142, of the School 
Section Addition to Chicago, under a certain lease and 
supplemental lease from the Board of Education of the 
City of Chicago, in reference to your notice informing 
them of the recent alleged appraisal of said real estate, 
made by Messrs. McLaren, Waterman and Kerfoot, and 
your request for the payment of rent upon the basis al- 
leged to have been established by said alleged appraisal, 
for the purpose of preserving and protecting the rights 
secured to the undersigned by law and by the terms and 
provisions of said lease and supplemental lease, hereby 
protest and object to the said alleged appraisal and to 
the payment of rent upon the basis alleged to be estab- 



324 

lished by said alleged appraisal, and as grounds for their 
protest and objection, respectfully submit the following, 
to-wit : 

(1) That the said John McLaren, the said Arba N. 
Waterman and the said William D. Kerfoot were not, 
nor were any or either of them, legally or properly ap- 
pointed or designated to act as appraisers of the above 
mentioned property, as required and contemplated by 
said lease and supplemental lease. 

(2) That said alleged appraisers did not, nor did any 
or either of them, prior to making said alleged appraisal, 
make or take any such oath as was required in and by 
said lease and supplemental lease. 

(3) That the said alleged appraisers had not, nor had 
an}^ or either of them jurisdiction, right or authority to 
act as such appraisers under said lease and supplemental 
lease; that the undersigned have never submitted to the 
jurisdiction of said alleged appraisers, or waived their 
right to object to said alleged appraisers acting as such, 
or to any action of said alleged appraisers, but that, on 
the contrary, all proceedings of said alleged appraisers 
were had and taken over and against the written protest 
and objection of the undersigned, dated March 29, 1905, 
a copy of which has heretofore been delivered to and 
served upon you, arid by reference thereto said written 
protest is hereby expressly made a part hereof precisely 
the same as if it were literally set forth herein. 

(4) That said alleged appraisers, in making their al- 
leged appraisal of the above described real estate, have 
disregarded the provisions of said supplemental lease in 
that they have failed to take into consideration, among 
other things, the improvements on said land, the char- 



325 

acter, condition, value, costs, rental, expenses and other 
particulars thereof, and have failed to take into account 
any of the facts and information presented to them and 
within their knowledge with reference to the value of 
said land and have otherwise disregarded the provisions 
of said leases. 

(5) That no valid appraisal of said land has been made 
in the year 1905 in conformity with said lease and sup- 
plemental lease, and that the value pretended to be placed 
upon said land by said alleged appraisers is excessive, 
exorbitant, unreasonable and far in excess of the true 
cash value of said premises (not taking into considera- 
tion the improvements thereon), and, if enforced, will re- 
sult in a practical confiscation of the building located 
upon said land and the rights of the undersigned under 
said leases. 

In view of the foregoing the undersigned respectfully 
request that before any action is taken by said Board 
of Education looking to the adoption, confirmation or ap- 
proval of said alleged appraisal, or the enforcement 
thereof, a hearing be accorded the undersigned with ref- 
erence to the aforesaid objections and protest. 

EespectfuUy submitted, 

Benjamin J. Eosenthal, 
Louis Eckstein, 

Lessees as Aforesaid. 



326 



Pbotest of Rosalie Cavana. 

Chicago, III., June 21, 1905. 

To the Board of Education of the City of Chicago: 

The undersigned, Rosalie Cavana, lessee of Lot 8, in 
Block 142, of the School Section Addition to Chicago, 
under a certain lease and supplemental lease from the 
Board of Education of the City of Chicago, in reference 
to your notice informing them of the recent alleged ap- 
praisal of said real estate, made by Messrs. McLaren, 
Waterman and Kerfoot, and your request for the pay- 
ment of rent upon the basis alleged to have been estab- 
lished by said alleged appraisal, for the purpose of pre- 
serving and protecting the rights secured to the under- 
signed by law and by the terms and provisions of said 
lease and supplemental lease, hereby protests and objects 
to the said alleged appraisal and to the payment of rent 
upon the basis alleged to be established by said alleged 
appraisal, and as grounds for her protest and objec- 
tion, respectfully submit the following, to-wit : 

(1) That the said John McLaren, the said Arba N. 
Waterman and the said William D. Kerfoot were not, 
nor were any or either of them legally or properly ap- 
pointed or designated to act as appraisers of the above 
mentioned property, as required and contemplated by 
said lease and supplemental lease. 

(2) That said alleged appraisers did not, nor did any 
or either of them, prior to making said alleged appraisal, 
make or take any such oath as was required in and by 
said lease and supplemental lease. 

(3) That the said alleged appraisers had not, nor had 
any or either of them, jurisdiction, right or authority to 



327 

act as such appraisers under said lease and supplemental 
lease ; that the undersigned have never submitted to the 
jurisdiction of said alleged appraisers, or waived their 
rights to object to said alleged appraisers acting as such, 
or to any action of said alleged appraisers. 

(4) That said alleged appraisers, in making their al- 
leged appraisal of the above described real estate, have 
disregarded the provisions of said supplemental lease 
in that they have failed to take into consideration, among 
other things, the improvements on said land, the char- 
acter, condition, value, costs, rental, expenses and other 
particulars thereof, and have failed to take into account 
any of the facts and information presented to them and 
within their knowledge with reference to the value of 
said land and have otherwise disregarded the provisions 
of said lease. 

(5) That no valid appraisal of said land has been 
made in the year 1905 in conformity with said lease and 
supplemental lease, and that the value pretended to be 
placed upon said land by said alleged appraisers is ex- 
cessive, exorbitant, unreasonable and far in excess of 
the true cash value of said premises (not taking into 
consideration the improvements thereon), and, if en- 
forced, will result in a practical confiscation of the build- 
ing located upon said land and the right of the under- 
signed under said lease. 

In view of the foregoing the undersigned respectfully 
requests that before any action is taken by the said 
Board of Education, looking to the adoption, confirma- 
tion or approval of said alleged appraisal, or the en- 
forcement thereof, a hearing be accorded the under- 



328 

signed with reference to the aforesaid objections and 

protest. 

Respectfully submitted, 

Rosalie Cavana^ 
Lessee as Aforesaid. 

Peotest op Daniel F. Chilly. 

Chicago, III., June 21, 1905, 

To the Board of Education of the City of Chicago, 
Chicago, Illinois. 
Gtentlemen : The undersigned lessee of the south 8 
feet of Lot 23 and all of Lots 24, 25, 26 and 27, in Block 
142, in School Section Addition to Chicago, under lease 
dated May 8, 1878, and supplemental lease from your 
honorable body, in compliance with the provisions of said 
lease, and for the purpose of preserving and protecting 
his rights in and to the said lease and the property there- 
in described, hereby objects and excepts to the action of 
Messrs. John McLaren, Arba N. Waterman and William 
D. Kerfoot, purported to have been taken by them as 
appraisers of school property, and to the alleged ap- 
praisement made by them, and to the payment of rent 
based upon the amount of the said appraisement. 

The grounds of this objection and exception are in 
part as follows : 

1. That the said John McLaren, Arba N. Waterman 
and William D. Kerfoot were not properly appointed as 
appraisers under the terms and provisions of the said 
lease as amended, and had no right or authority to act 
as appraisers under said lease as amended. 



329 

2. That the said persons above named in making their 
alleged appraisement on the property above described 
wholly disregarded numerous provisions of the said lease 
as amended. 

3. That the persons above named in making their al- 
leged appraisement of the above described property 
wholly failed to take into account or consideration any 
of the facts and information presented to them by the 
undersigned. 

4. That said persons above named in making their al- 
leged appraisement of the above described real estate 
disregarded the valuation requested by your honorable 
body to be placed upon the said premises, and placed 
upon the said premises a valuation far in excess of the 
valuation your honorable body requested the said ap- 
praisers to place upon the said premises. 

5. That the valuation placed upon the said land by 
the said appraisers is excessive, exorbitant and unrea- 
sonable when considered in connection with the terms 
of the said lease as amended, and if enforced will result 
in a confiscation of the building located upon the said 
land and the rights of the undersigned under said lease. 

6. By reason of the above, and for the further reason 
that the said contract of lease between the undersigned 
and your honorable body was executed upon the belief 
and understanding of both parties thereto, that said land 
was exempt from taxation, whereas by a recent decision 
of the Supreme Court of this city the said property has 
been subjected to the additional burden of taxation, 
which the undersigned must bear contrary to the spirit 
and intent of said contract of lease, the undersigned 
is entitled to a modification of the said appraisal. 



330 

It is, therefore, respectfully suggested that before any 
action is taken by your honorable body, looking to the 
enforcement of said alleged appraisal, an opportunity 
should be given for the consideration of such possible 
modification of said appraisal as may appear to be for 
the best interests of both lessor and lessee. 

Daniel F. Crilly. 

Peotest of Ava W. Farwell. 

To the Board of Education of the City of Chicago: 

The undersigned, Ava W. Farwell, owner of the lease 
from the Board of Education to lots twenty (20) and 
twenty-one (21), in block one hundred and forty-two 
(142), in School Section Addition to Chicago, being cer- 
tain lease and supplemental lease from the Board of Edu- 
cation of the City of Chicago, in response to your notice 
and to all notices informing me of the recent alleged ap- 
praisal of said real estate, made by Messrs. McLaren, 
Waterman and Kerfoot, and your request for the pay- 
ment of rent upon the basis and valuation alleged to 
have been established by said appraisal for the purpose 
of preserving and protecting the rights secured to the 
undersigned by law, and by the terms and provisions 
of said lease and supplemental lease, hereby protests and 
objects to the said alleged appraisal and to the payment 
of rent upon the basis claimed to have been established 
by said alleged appraisal, and as grounds for such ob- 
jections and protest submits the following, to-wit: 

First. The said John McLaren, Arba N. Waterman 
and the said William D. Kerfoot, and each of them, were 
not legally or properly appointed or designated to act as 



331 

appraisers of the above mentioned property, as required 
and contemplated by said lease and supplemental lease. 

Second. Said Waterman, Kerfoot and McLaren, and 
each of them, were incompetent to act as such appraisers. 

Third. Neither said McLaren, Waterman or Kerfoot 
were appointed at the time and by authority provided by 
said lease and supplemental lease. 

Fourth. That the said persons above named have and 
had no jurisdiction, right or authority to act as such ap- 
praisers under said lease and supplemental lease. 

Fifth. That said persons above named in making their 
alleged appraisal of the value of the above described real 
estate, disregarded the provisions of said supplemental 
lease, especially in that they failed to take into considera- 
tion the improvements on said premises, the character, 
condition, value, cost, rental, expenses and other partic- 
ulars thereof. 

Sixth. Said alleged appraisers disregarded all legit- 
imate evidence as to the value of said premises, and 
erroneously and wrongfully placed their valuation there- 
on without any legitimate or proper evidence to support 
the same, and without the consideration of any fact which 
would warrant their conclusion in that regard. 

Seventh. That the value placed upon said. lands by 
said alleged appraisers is excessive, exorbitant, unrea- 
sonable, unjust, and when considered in connection with 
the conditions imposed by the said lease and supplement- 
al lease, would result in a confiscation of the building 
located upon said land, and owned by the undersigned, 
and of all the rights of the undersigned under said lease 
and supplemental lease. 



332 

Eighth. The said lease and supplemental lease were 
made under a misapprehension of facts in this, that it 
was the understanding of both parties that said premises 
would not be subject to taxation, and said lease should 
be modified to conform with the decision of the Supreme 
Court in this regard. 

Eespectfully submitted, 

AvA W. Fabwell, 
By J. A. Parwell. 

Peotest op James K. Sebeee. 

To the Board of Education of the City of Chicagoj 

The undersigned, James K. Sebree, lessee of lots eight- 
een (18) and nineteen (19), of block one hundred and 
forty-two (142), in School Section Addition to Chicago, 
County of Cook, and State of Illinois, under a certain 
lease and supplemental lease from the Board of Educa- 
tion of the City of Chicago, in response to your notice 
informing him of the recent alleged appraisal of said 
real estate made by Messrs. McLaren, Waterman and 
Kerfoot, and the request of the Board of Education for 
the payment of rent upon the basis alleged to have been 
established by said appraisal, for the purpose of pre- 
serving and protecting the rights secured to the under- 
signed by "law, and by the terms and provisions of said 
lease and supplemental lease, hereby protests and ob- 
jects to the said alleged appraisal and to the payment of 
rent upon the basis established by said alleged appraisal, 
and to the sufficiency of the notice above referred to, 
and as grounds for his said protest and objection, re- 
spectfully submits the following, to-wit : 



333 

1. That the said John McLaren, Arba N. Waterman 
and William D. Kerfoot, and each of them, were not le- 
gally or properly appointed or designated to act as ap^ 
praisers of the above mentioned property, as contem- 
plated and required by said lease and supplemental lease. 

2. That the said persons above named had no juris- 
diction, right or authority to act as such appraisers un- 
der the said lease and supplemental lease, and were in- 
competent to act as such. 

3. That the said persons above named as appraisers 
were not appointed, nor was either of them appointed, 
at the time, in the manner and by the authority provided 
for by said lease and supplemental lease. 

4. That the said persons above named, in making their 
alleged appraisal of the above described real estate, have 
disregarded the provisions of the said lease and supple- 
mental lease in various respects, in that, among other 
things, they have failed to take into consideration the 
improvements of said land, the character, condition, val- 
ue, cost, rental, expenses and other particulars thereof. 

5. That the said alleged appraisers have failed to 
take into account and give due weight to the evidence 
presented before them upon the value of the said prem- 
ises. 

6. That the said alleged appraisers disregarded and 
refused to consider a large portion of the evidence as 
to the value of the said premises and erroneously and 
wrongfully placed their valuation thereon, without any 
legitimate or proper evidence to support the same, and 
without the consideration of any fact which would war- 
rant their conclusions in that regard. 



334 

7. That the value placed upon the said land by the 
said alleged appraisers is excessive, exorbitant, unrea- 
sonable and unjust, and when considered in connection 
with the conditions imposed by the said lease and supple- 
mental lease, and if enforced, will result in the confisca- 
tion of the building located upon the said land, owned 
by the undersigned, and all of the rights of the under- 
signed under the said lease and supplemental lease. 

8. That the said lease and supplemental lease were 
made under a misapprehension of the facts in this, that 
it was the understanding of both parties at the time when 
the said lease and supplemental lease were executed, that 
the said premises would not be subject to taxation but 
would be exempt therefrom, whereas it now appears from 
the recent decision of the Supreme Court of the State of 
Illinois, that the undersigned is liable to be subjected to 
the additional burden of taxation, contrary to the inten- 
tion of the parties at the time when the said lease and 
supplemental lease were executed, and contrary to the 
spirit and intention of the said lease and supplemental 
lease. 

The undersigned respectfully suggests, therefore, that 
he is entitled to a modification of the terms of the said 
lease and supplemental lease, for the reasons above 
stated; and that an opportunity should be given for the 
consideration of possible modifications of the said ap- 
praisal, and of the terms of the said lease and supple- 
mental lease, as may appear for the best interest of all 
parties concerned. 

Respectfully submitted, 

James K. Sbbeee, 
Lessee as Aforesaid. 



335 



PROTEST OF McVICKER THEATER COMPANY. 

Chicago, 111., June 21, 1905. 
To the Board of Education of the City of Chicago: 

The McVicker Theatre Company, which owns and 
holds, on the lessee's part, the lease of Lots 9, 10 and 11 
in Block 142 in the School Section Addition to Chicago, 
executed by your honorable body under date of May 8, 
1880, to Harriet G. McVicker, and s.upplement thereto, 
dated June 15, 1888, hereby makes protest against the 
alleged appraisal of said land lately claimed to have been 
made by John McLaren. William D. Kerfoot and Arba 
N. Waterman, and. objects to said alleged appraisal, and 
the payment of rent based thereupon, and in support of 
its protest and objection the undersigned submits the 
following: 

1. That said McLaren, Waterman and Kerfoot were 
not legally or properly appointed or designated to act 
as appraisers under said lease and said supplement 
thereto, and that no valid Board of Appraisers under 
said lease and supplement was ever appointed or desig- 
nated to make a reappraisement for the period beginning 
May 8, 1905, and the undersigned insists that it is en- 
titled to the judgment of a majority of a valid Board 
of three Appraisers, and that no such board was in fact 
appointed, and that said alleged appraisement was in 
fact null and void. 

2. That the facts in relation to the alleged or sup- 
posed designation of the said McLaren, Waterman and 
Kerfoot, as a Board of Appraisers under said lease and 
supplemental lease have come to the knowledge of the 



336 

undersigned since the making of said alleged appraise- 
ment. 

3. That said supposed appraisers in making their 
said alleged appraisement disregarded wholly the pro- 
visions of said supplemental lease which in justice and 
equity required them to take into consideration the char- 
acter of the improvements upon said land, and the char- 
acter, condition, value, cost, rental expenses and other 
particulars thereof, and ignored and held for naught 
such information and many facts presented to them with 
reference to the leasehold premises. 

4. That the annual rental of $53,776.80 for said prem- 
ises, now claimed by you, upon the basis of said alleged 
and invalid appraisement, exceeds by $10,000 the whole 
annual income which can be derived from the said prem- 
ises and the present improvements thereupon, after de- 
ducting the taxes upon the building, insurance and the 
necessary cost of operating the building. 

5. That the value placed upon said leased lands by 
the said alleged appraisers is utterly unreasonable and 
exorbitant, when considered in connection with the bur- 
dens imposed by the said lease, and if enforced will 
amount to a practical confiscation of the existing im- 
provements and the rights of the undersigned. 

6. That it is a well known fact that said lease was en- 
tered into under the belief and understanding, then com- 
mon, that said land was exempt from general taxation, 
but by a recent ruling of the Supreme Court of the State 
of Illinois said lands are not so exempt, and are liable 
to be subjected to a very great burden of additional tax- 
ation. 

It is, therefore respectfully suggested, by the under- 



337 

signed, that your Honorable Board before seeking to en- 
force said alleged appraisal, take into consideration the 
whole situation, with a view of making some rearrange- 
ment which will be for the best interests of both lessor 
and lessee. 

EespectfuUy, 

McViCKER Theatre Company. 

By Sol, Litt, 
Its Secretary. 



INDEX 



Page. 

Appraisers, appointment of 1- 3 

Appraisers ' final report 311-316 

Appointment of John McLaren 1- 2 

Acceptance of John McLaren 2 

Appointment of Elbridge G. Keith 3 

Appointment of Arba N. Waterman 3 

Appointment of Wiliam D. Kerf oot 9-10 

Acceptance of William D. Kerf oot 10 

Appointment of appraisers confirmed 7 

Appraisers ' notice to board 21 

Bishop, A. & Co., protest 23 

Statement in behalf of 164-190 

Eeply of Board of Education 190-200 

Eequest for extension of time to reply 201-202 

Statement in rebuttal 203-20S 

Protest against appraisement 319-321 

Blair, Charles H. — 

Statement in behalf of 239-261 

Eeply of Board of Education 261-268 

Statement in rebuttal 269-285 

Valuation by Chicago Eeal Estate Board 230 

Letter of Joseph P. Walthier & Co., tenant 234 

Letter of Neely Bros., tenant 237 

Letter of Bernhards, tenant 243 

Letter of Forster Shirt Co., tenant 246 

Letter of W. H. Freeman, tenant 250 

Letter of Dan Wagner, tenant 252 

Letter of T. McGauley, tenant 256 

Letter of Drs. Garrison & Maddock 257 

Board of Appraisers, proceedings before 27-310 

Cavanna, Eosalie, statement in behalf of i . . . . 214-219 

Eeply of Board of Education 219-224 

Statement in rebuttal , 224-228 

Protest against appraisement 322 



11 

Page. 

Crilly, Daniel F., statement in behalf of 66-107 

Reply of Board of Education 101-116 

Statement in rebuttal 116-132 

Evidence of John B. Knight 132-142 

Evidence of Edgar M. Snow 142-149 

Argument of Mr. Eush Butler 149-160 

Eeply by Mrs. James E. Maher 161-164 

Protest against appraisement 328-330 

Farwell, Ava W., statement in behalf of 55- 61 

Eeply of Board of Education 61- 65 

Protest against appraisement 330-332 

Final report of appraisers to board 311-316 

Forfeiture of leases, proceedings of board 316-318 

Hurtz, estate of Margaret, statement in behalf of 289-300 

Affidavit of Eoyal D. Smith 301 

Eeply of Board of Education 303-304 

Statement in rebuttal 304-306 

Jenkinson, Est. of Geo. B., protest 23 

Statement in behalf of 164-190 

Eeply of Board of Education 190-200 

Eequest for extension of time to reply 201-202 

Statement in rebuttal 202-208 

Protest against appraisement ' 319-321 

Keith, Elbridge G., appointment 3 

Keith, Elbridge G., resignation of . 10 

Kerfoot, William D., appointment of 9 

Kerf oot, Wililam D., oath 12 

Kerfoot, William D., oath 14 

Kerfoot, William D., oath 17 

Kesner, Jacob L., protest 23 

Statement of Board of Education 212-214 

Protest against appraisement 323-324 

Knight, John B., testimony in behalf of Daniel F. Crilly 132-142 

List of property to be appraised. 5- 7 

Lasker, C. W., statement in behalf of 208-210 

Eeply of Board of Education 210-212 

licases, forfeiture of 316-318 

McLaren, John, appointment of 1-2 



Ill 

Page. 

McLaren, John, acceptance of 2 

McLaren, John, oath 14 

McVicker Treater Co., statement in behalf of 27- 37 

Eeply of Board of Education 37- 44 

Statement in rebuttal 45- 47 

Answer of B. A. Fessenden 48- 54 

Protest against appraisement 335-337 

Notice of appraisers to board 21 

Notice of board to lessees 316- 17 

Oath of appraisers, original 11 

Oath of William D. Kerf oot 12 

Oath of William D. Kerfoot 17 

O 'Malley, John, Jr., statement in behalf of 286 

Eeply of Board of Education 287 

Statement in rebuttal 288 

Proceedings of board relating to appointment of appraisers.... 1- 20 

Proceedings of board relating to forfeiture of leases 316-320 

Proceedings before Board of Appraisers 27-306 

Property to be appraised 5- 7 

Protest of property owners to appointment of appraisers 23-26 

Protests against appraisement 328-330 

Eand McNally & Co., statement in behalf of 306 

Eeport of committee recommending appointment of McLaren. ... 1-2 

Eeport of appraisers 311-316 

Eesolution, forfeiting leases 319 

Eosenthal, Benj. J., protest 23 

Statement in behalf of 164-'190 

Eeply of Board of Education 190-200 

Eequest for extension of time to reply 201-202 

Statement in rebuttal 203-208 

Protest against appraisement 323-325 

Eounsavell, Est. of Geo., protest 23 

Statement in behalf of 164-190 

Eeply in Board of Education 190-200 

Eequest for extension of time to reply 201-202 

Statement in rebuttal 203-208 

Protest against appraisement 323-325 

Sebree, James K., statement in behalf of 55- 61 

Eeply of Board of Education 61-65 

Protest against appraisement 332-334 



IV 

Page. , 
Snow, Edgar M., testimony in behalf of Daniel F. Crilly 142-149 

Stumer, Louis, protest 23 

Statement in behalf of 164-190 

Eeply of Board of Education 190-200 

Bequest for extension of time to reply 201-202 

Statement in rebuttal 203-208 

Protest against appraisement 323-325 

Vacancies in Board of Appraisers, now filled 8 

Wacker & Birk Brewing & Malting Co. — 

Statement in behalf of 309 

Eeply by Board of Education 309 

Waterman, Arba N., appointment of 3 

Waterman, Arba N., oath 14 

Waterman, Arba N., oath 17 

Weil, Est. of Henry, protest 23 

Statement in behalf of 164-190 

Eeply of Board of Education 190-200 

Bequest for extension of time to reply 201-202 

Statement in rebuttal 203-208 

Protest against appraisement 323-325 



